Iranian leaders are scheduled to debate the ban Sunday in response to EU plans to impose an embargo on Iran's oil by summer because of that country's nuclear program. Investors worry that any ban could cause supply disruptions.
Benchmark West Texas Intermediate crude fell 14 cents to finish at US$99.56 a barrel after climbing as high as US$100.63 earlier in the session. Brent crude, used to price oil imported by U.S. refineries, rose 67 cents to end at US$111.46 a barrel in London.
EU countries account for about 18 per cent of Iran's oil exports. Analysts believe any shortfall in Europe could be made up by other countries. If it stops selling oil to Europe, Iran should find takers in Asia. China is its biggest customer.
Iran also has threatened to block the strategic Strait of Hormuz in the Persian Gulf. About one-fifth of the world's supply of oil is shipped through the strategic waterway. The U.S. and other countries have said they will not tolerate an Iranian blockade and U.S., British and French warships regularly patrol the gulf.
In other trading, gasoline futures jumped almost three per cent on concerns about future supplies after next month's closure of the big Hovensa refinery in the U.S. Virgin Islands. It produced about 350,000 barrels per day, but the high price of crude has made it unprofitable. The closure comes as many refineries slow down for regular spring maintenance.
Gasoline futures rose eight cents to end at US$2.92 a U.S. gallon (3.79 litres). Futures prices are up about 10 per cent since the start of the year.
Natural gas prices rose again Friday after dropping more than four per cent on Thursday. Futures contracts rose seven cents, or 2.8 per cent, to finish at US$2.68 per 1,000 cubic feet.
Natural gas hit a 10-year low last week, driven down by huge supplies and mild winter weather that's kept furnaces turned down. Now forecasts show a colder weather pattern emerging for the U.S. Midwest and the Northeast in February, which would mean more natural gas will be needed for heating.
The buildup of natural gas supplies may also slow as producers cut back. Chesapeake Energy, ConocoPhillips and Consol Energy said this week that they would reduce some natural gas operations.
Heating oil futures rose two cents to end at US$3.07 a gallon.
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