Oil on Friday climbed to the highest level this year on expectations that supplies will tighten in the spring.
Traders think that oil supplies from the Middle East could slow, if Iran continues to clash with Western nations over its nuclear energy program. The European Union, which buys 18 percent of Iranian oil exports, plans to embargo Iranian oil this summer. Iran says it might stop sales to Europe before then.
Meanwhile, banks are helping to slow Iranian oil sales by restricting the flow of cash that could be directed to Iran's nuclear program, which the West fears may be building a bomb. Iran gets about half of its revenue from oil.
International oil prices have jumped 10 percent as the dispute heated up this year. That has boosted the price of other kinds of crudes, including those produced in the U.S.
Benchmark U.S. crude rose 93 cents on Friday to end the week at $103.24 per barrel in New York. That eclipsed the previous high for the year of $103.22 set on Jan. 4. Brent crude, an international benchmark that already has surged this year, fell by 53 cents to finish at $119.58 per barrel in London as investors locked in profits.
"When Brent gets north of $120, it starts to inspire some fear" among investors that the prices have risen too high, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Brent is used by some U.S. refiners to produce gasoline, which is at a record high for this time of year. Retail gasoline prices rose less than a penny to a national average of $3.53 per gallon on Friday, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 15 cents higher than it was a month ago and about 38 cents more than a year ago.
Investors are also keeping an eye on Europe and the recovering U.S. economy. European leaders said Friday that they were optimistic about a second bailout for Greece, easing fears of a banking crisis that could sap energy demand.
In the U.S. a series of economic reports this week pointed to a stronger economy and increasing demand for oil. Hot on the heels of a drop in unemployment claims reported Thursday, the government said Friday that consumer prices rose only modestly in January and a private group's reading of future economic activity climbed in January for the fourth straight month.
In other energy trading, natural gas futures jumped by 12 cents, or 4.6 percent, to finish at $2.68 per 1,000 cubic feet, spurred by a government report on Thursday that said U.S. supplies declined more than expected last week.
Heating oil fell by 2 cents to end at $3.1889 per gallon. Gasoline futures fell 3 cents to finish at $3.02 per gallon.