The price of oil appeared headed for a close well above $107 US a barrel Thursday.
Crude for April delivery rose by $1.38 to $107.66 per barrel in New York in mid-afternoon trading.
Retail gasoline prices rose. Price-tracking website GasBuddy.com reported the price of regular gasoline on average in Canada was 1.25 a litre, up 6/10ths of a cent from Wednesday.
Oil has been rising on concerns that Iran will try to cut off more oil supplies to Europe ahead of a planned EU oil embargo in August. Such a move would temporarily tighten supplies as refineries search for alternative sources of crude.
Iran was shipping about 18 per cent of its crude exports to Europe, but many countries there have already scaled back or stopped buying Iranian oil entirely.
Crude has jumped from $96 US a barrel earlier this month and $75 in October.
At the same time, natural gas fell after the U.S. government said supplies remain significantly higher than average levels for this time of year.
Natural gas futures fell by five cents to $2.60 per 1,000 cubic feet in New York.
A boom in North American shale drilling has filled underground storage facilities across the country. The Energy Information Administration says supplies are more than 40 per cent higher than the five-year average.
Major natural gas producers recently cut back on production, as prices linger around a 10-year low. But analysts say they're not doing enough to reduce the glut.
"There's still an avalanche of gas available right now," said Gene McGillian, a broker and oil analyst at Tradition Energy.
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