Oil price waver on Persian Gulf supply concerns

[January 28, 2012]  (AP) -- Oil prices moved in a narrow range Friday as Iran prepared to consider a ban on crude sales to European Union countries.

Iranian leaders are scheduled to debate the ban Sunday in response to EU plans to embargo Iran's oil by summer because of that country's nuclear program. Investors worry that any ban could cause supply disruptions.

Benchmark oil fell 14 cents to finish at $99.56 per barrel after climbing as high as $100.63 per barrel earlier in the session. Brent crude rose 67 cents to end at $111.46 per barrel in London.

EU countries account for about 18 percent 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 oil 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 nations have said they will not tolerate an Iranian blockade. U.S., British and French warships regularly patrol the Gulf.

In other trading, gasoline futures jumped almost 3 percent 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 8 cents to end at $2.92 per gallon. Futures prices are up about 10 percent since the start of the year.

Natural gas prices rose again on Friday, after dropping more than 4 percent on Thursday. Futures contracts rose 7 cents, or 2.8 percent, to finish at $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 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 2 cents to end at $3.07 per gallon.

At the pump, AAA says the national average for a gallon of regular gasoline rose a penny on Friday, to $3.39. That's about 15 cents more than a month ago and nearly 29 cents more than a year ago.

[Associated Press; By SANDY SHORE]

AP Energy Writer Jonathan Fahey contributed to this report.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.