Crude-oil futures fell Monday and natural-gas prices traded only slightly higher as severe weather in the Northeast failed to raise much concern after last week's ample U.S. inventories data and a lower 2006 oil-demand growth outlook.

Despite the heavy weekend snowfall, the oil market "seems convinced it will take more than one historic winter storm to eat away at plentiful energy supplies," said Phil Flynn, a senior analyst at Alaron Trading.

Winter storms dumped some 27 inches of snow in New York's Central Park, making it the worst one-day blizzard since records began, while thousands of people in Maryland and New Jersey were left without power.

Even so, "the market thinks winter is almost over and the chances of another storm hitting or enough cold to draw down supply is about as likely as getting hit with a record number of hurricanes," said Flynn.

Crude for March delivery fell 34 cents to stand at $61.50 a barrel on the New York Mercantile Exchange.

March heating oil nudged higher on the back of the fierce weather, adding 0.64 cent at $1.649 a gallon. March natural gas tacked on 3.4 cents to $7.35 per million British thermal units.

March unleaded gasoline was at $1.465 a gallon, up 0.29 cent.

The storms have raised few worries among energy traders because they are coming relatively late in the winter season, said Michael Lewis, analyst at Deutsche Bank in London.

"Cold weather at this stage of the winter is not really going to have a big effect," he said.

Lewis noted if the storms had come at the beginning of winter, or in an environment where inventories were low, they could have caused a significant jump in prices.

"The inventory situation is one of a very amply supplied market," he noted.

The most recent Energy Department figures show gasoline and crude stockpiles are both more than 10% above year-ago levels.

The International Energy Agency also recently cut its 2006 oil-demand forecast to 1.78 million barrels of oil a day from 1.83 million barrels a day.

In energy equities, benchmarks tracking the oil and gas sectors were little changed, with the Amex Oil Index making the biggest headway. See Energy Stocks.

Meanwhile, gold futures edged lower to start the week but held their ground above $550 an ounce. See Metals Stocks.

Taking a broad measure of the commodity-futures markets, the Reuters/Jefferies CRB Index rose 0.3% to 337.0 points on the New York Board of Trade

Oil Rises After Tumbling Below $58 on Rise in U.S. Inventories
Feb. 16 (Bloomberg) -- Crude oil rose for the first day in four in New York after falling below $58 for the first time this year when a government report showed U.S. oil stockpiles jumped almost five times as much as analysts had expected.

Crude-oil supplies climbed 4.9 million barrels to 325.6 million last week, the highest since June, the Energy Department said yesterday. Oil fell as low as $57.60 a barrel, erasing gains that started late December on concern Iran may cut oil exports in the dispute over its nuclear program.

``We're finding some support here but I don't think it's going to last,'' said Mike Sander, a commodities broker with Altavest Worldwide Trading Inc. in Mission Viejo, California. ``The concerns about Iran have been put on the back-burner for now and the fundamentals have taken over.''

Crude oil for March delivery rose as much as 49 cents, or 0.9 percent, to $58.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $58.10 at 10:15 a.m. in Sydney, 20 percent higher than a year ago.

The contract plunged $1.92, or 3.2 percent, to $57.65 a barrel yesterday, the lowest close since Dec. 19 and the biggest one-day decline in nine weeks.

Oil reached a four-month high of $69.20 last month, the highest since Hurricane Katrina struck the U.S. in August, on concern Iran may cut its exports if the United Nations imposed sanctions to make it stop its nuclear research. The UN's nuclear watchdog has given the Islamic republic, the world's fourth- largest oil producer, until March 6 to halt the work.

Oil Slides

``We were at pre-Katrina levels in January when usually crude is coming down,'' Altavest's Sander said. ``We just got to a point where it stopped making sense.''

Oil has fallen 14 percent this month, as U.S. oil and gasoline stockpiles jumped.

U.S. oil inventories last week were 12 percent higher than the five-year average for the period, the department's report showed. A one-million barrel increase had been expected, based on the median forecast from a Bloomberg survey of 13 analysts.

Gasoline supplies rose for a seventh straight week to 225 million barrels, the highest since June 1999.

``The market got way ahead of itself and we're now moving to a price that's in line with the fundamentals,'' Tom Bentz, an oil broker with BNP Paribas Commodity Futures Inc. in New York said yesterday. ``The only question is how much farther we have to go.''

Oil touched a record $70.85 on Aug. 30, the day after Katrina slammed into Louisiana and Mississippi, shutting platforms and refineries.

Gasoline

Gasoline for March delivery rose to $1.40 a gallon in after-hours trading, after easing 0.01 cent to $1.3848 yesterday, the lowest close since Feb. 28, 2005. It was the eighth straight decline, the longest string since early October.

Gasoline has plunged 20 percent this month on signs that supplies will be sufficient to meet demand during the summer driving season.

``Gasoline stocks are rising because it needs to happen,'' said Mark Routt, oil analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``Refiners know that they have to store supply for when they aren't operating and turnarounds are right around the corner.''

Refinery maintenance, known as turnarounds, usually occurs in late February and March as the heating season wanes. Units are repaired and upgraded in advance of the summer when gasoline demand peaks. Refineries operated at 86.1 percent of their capacity last week, up 0.3 percentage point from the prior week.

Maintenance was deferred last fall because Hurricanes Katrina and Rita shut units along the Gulf of Mexico.

Heating Oil

Heating oil for March delivery rose to $1.6155 a gallon in after-hours trading after declining 0.25 cent to $1.6075 yesterday, the lowest close since July 26.

Heating-oil supplies fell 666,000 barrels to 57.3 million last week, the report showed. Stockpiles are 20 percent above the five-year average.

``Supplies are pretty lush,'' Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina, said yesterday. ``The geopolitical concern and economic growth are still there in the background supporting prices.''

The Organization of Petroleum Exporting Countries, which produces about 35 percent of the world's oil, yesterday forecast 2006 oil demand would rise 1.6 million barrels a day, or 1.9 percent, to 84.6 million barrels.

Iran and Russia will meet on Feb. 20 to discuss a proposal aimed at breaking a deadlock over the disputed nuclear program. The International Atomic Energy Agency will then meet on March 6 to possibly formalize Iran's referral to the United Nations Security Council, which could impose economic sanctions.

Oil is going down!!! I have a feeling it won't be for long though, but hopefully I'm wrong.

Seth

It's a similar story in western Pennsylvania, the Pittsburgh Business Times reports. Even before Hurricanes Katrina and Rita hammered Gulf of Mexico oil and natural gas production, Pennsylvania -- the birthplace of oil extraction -- was experiencing a 20 percent surge in drilling permits for the second year. "We're seeing much more activity now, but there is not enough men or equipment to satisfy demand," said Jim McElwain, president of S.W. Jack Drilling in Indiana, Pa.

It's not just the old fields experiencing new attention. It's also some old debates, like offshore drilling.

Drilling offshore is only allowed off the Louisiana, Texas, Alabama and Alaska coasts. But some experts estimate that there are 76 billion barrels of oil and 406 trillion cubic feet of natural gas underneath the Outer Continental shelf that runs along East and West coasts.

Tapping that potential reserve could cut the need for foreign oil and diversify domestic sources, proponents of drilling say. And they add that the shock of Hurricane Katrina ought to make those who have opposed such drilling more receptive.

"In a lot of ways, the hurricane really exposes our vulnerability," says Keith McCoy, vice president of resources and environmental policy for the National Association of Manufacturers. "It's opened some eyes."

But environmentalists, as well as business interest like tourism and fishing, say drilling offshore in areas that depend on the ocean for livelihoods is no answer at all.

WWe can reduce the effect of future disruptions by reducing our dependence on oil, not putting up more rigs and drilling our special places," says Carl Pope, executive director of the Sierra Club. "The fact is, we cannot drill our way to oil independence."

Consumers and politicians stunned by recent price increases may be inclined to agree.

Toyota, with its popular hybrids, was one of few automakers to report strong sales in the latest quarter.

And companies from Albany to Albuquerque with a stake in the alternative energy game are reporting renewed interest following the hurricanes and price hikes.

"It's generating a lot of questions and we're trying to see if there's a way we can get a boost from it in the immediate short term," Roger Saillant, CEO of fuel-cell maker Plug Power Inc., told the Albany Business Review. "It's just symptomatic of getting close to the end of oil dependency. It's no longer in the distant future. It's getting closer and closer."

Some politicians outside of Washington, D.C., also seem aware of that possibility.

In Washington state, the Puget Sound Business Journal reports, legislators are considering direct funding for a biodiesel refining operation in Eastern Washington. They hope the initiative could make Washington a leader in a new industry -- growing fuel instead of drilling for it.

Oil Prices Fall As Iran Concerns Ease on Announcement of Joint Uranium Venture With Russia

VIENNA, Austria (AP) -- Crude oil prices fell Monday, as concerns over Iran's nuclear ambitions eased with an announcement by the Islamic republic and Russia that they would establish a joint uranium enrichment venture.
Still, analysts suggested that -- although markets were well supplied -- the potential for political instability or violence in key producing nations was limiting the price decline.

Light, sweet crude for April delivery on the New York Mercantile Exchange lost 72 cents to $62.08 a barrel in electronic trading by afternoon in Europe. April Brent crude futures on London's ICE Futures exchange fell 68 cents to $61.92 a barrel.

On Sunday, Iran and Russia agreed in principle to establish a joint uranium enrichment venture, a breakthrough in talks on a U.S.-backed Kremlin proposal aimed at easing concerns that Tehran wants to build nuclear weapons.

But further negotiations on the details lay ahead, and it was not known whether Iran will entirely give up enrichment at home, a top demand of the West.

The deal -- announced by the two countries' top nuclear chiefs -- could deflect any move by the U.N. nuclear watchdog agency at a March 6 meeting to recommend the U.N. Security Council consider action on Iran.

Iran is OPEC's No. 2 oil producer behind Saudi Arabia, and worries that a nuclear standoff could affect Iran's oil output has lifted crude prices in recent weeks.

Iran's deputy nuclear chief, Mohammad Saeedi, warned that the deal would be off if the International Atomic Energy Agency refers Iran to the Security Council, a step that could lead to sanctions.

The United States accuses Iran of seeking to develop nuclear weapons but has backed the proposal if it means enrichment would take place entirely in Russia. Iran denies any intention to build weapons, saying it aims only to produce nuclear energy.

On Friday, the benchmark contract gained $2.37 a barrel after a thwarted attack by suicide bombers in explosives-packed cars on a massive oil facility in Saudi Arabia heightened supply fears.

Saudi Arabia is the world's largest oil producer, with output of about 9.5 million barrels per day, or 11 percent of global consumption. The target of the attack, the Abqaiq oil complex in eastern Saudi Arabia, processes about two-thirds of the country's oil before it is exported.

Vienna's PVM Oil Associates identified the "sheer psychological impact" of potential unrest or instability as a major factor in oil and energy markets.

"More than a third of the global oil supply ... (is) prone to uncertainties," it said, listing Iraq, Nigeria, Iran, Russia, Venezuela, Colombia and Ecuador and Saudi Arabia as nations either affected or at risk.

Gasoline and heating oil futures lost more than 3 cents each Monday in electronic trading, slipping to $1.5170 and $1.6955 a gallon, respectively. Natural gas declined 22 cents to $7.09 per 1,000 cubic feet.

Crude Oil Prices Fall As Concerns About Iran and Saudi Arabia Recede

SINGAPORE (AP) -- Crude oil futures fell Tuesday amid receding concerns about threats to supply in oil-rich hot spots like Iran, Nigeria, Saudi Arabia and Iraq.
Light, sweet crude for April delivery dipped 40 cents to $60.60 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract lost $1.91 Monday to settle at $61.00 a barrel.

The contract on Friday jumped by more than $2 a barrel after a thwarted attack by suicide bombers in explosives-packed cars on a massive oil facility in Saudi Arabia heightened supply fears.

April Brent crude futures on London's ICE Futures fell 33 cents to $60.66 a barrel.

"The supply of oil is still ongoing; most people feel there won't be a disruption, so they're taking profit now, especially after Friday's sharp increase," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

Still, analysts suggested that -- although markets were well supplied -- the potential for political instability or violence in key producing nations was keeping prices from falling further.

"The political risks are still in place, so the downside is going to be quite limited," Emori said.

A weekend announcement that Iran may let Russia shoulder some of its nuclear-development plans prompted selling.

The deal -- announced by the two countries' top nuclear chiefs -- could deflect any move by the U.N. nuclear watchdog agency at a March 6 meeting to recommend the U.N. Security Council consider action on Iran.

Oil traders have been worried that the nuclear standoff could undermine output from Iran, the No. 2 oil producer within the Organization of Petroleum Exporting Countries.

The U.S. and other countries are concerned that Iran is using its nuclear-research program as a cover for weapons development. An agreement with Russia could minimize jitters that sent crude futures shooting toward a record high earlier this year.

Ken Hasegawa of Tokyo-based brokerage firm Himawari CX said the front-month contract was likely to trade in the range of $60-62 a barrel in the short term, ahead of OPEC's meeting next month in Vienna.

"There is a possibility (for April crude) to break $60 support. At that time it should fall further to $57 a barrel," Hasegawa added.

Nymex gasoline futures fell 0.70 cent to $1.5180 a gallon while heating oil declined 0.56 cent to $1.6770 a gallon. Natural gas fell 10.8 cents to $6.681 per 1,000 cubic feet.

Oil Prices Rise Ahead of U.S. Inventory Report Expected to Show Decline in Gasoline Stockpiles

SINGAPORE (AP) -- Oil futures prices rose Wednesday ahead of weekly inventory data from the United States expected to show that stockpiles of gasoline and distillate fuels declined.
Light, sweet crude for April delivery on the New York Mercantile Exchange rose 50 cents to $61.91 a barrel in electronic trading by afternoon in Europe. The contract gained 41 cents on Tuesday.

April Brent crude on London's ICE Futures exchange gained 68 cents to $62.44 a barrel.

Nymex gasoline futures for April delivery rose 1.5 cents to $1.6055 per gallon, while heating oil rose nearly 2 cents to $1.7421 a gallon. Natural gas gained 7 cents to $6.780 per 1,000 cubic feet.

Crude oil prices continue to be supported by supply fears tied to threats such as Iran's standoff with the international community over nuclear power development and recent militant attacks on the oil industry in Nigeria.

Chevron Corp. said Wednesday an unexplained pressure drop in an oil pipeline crossing southern Nigeria caused it to shut down 13,000 barrels of daily crude production. Chevron said it couldn't confirm local media reports that a facility had been blown up by militants. A spokesman for militants behind recent violence in Nigeria said the group's fighters weren't responsible for any attack on Chevron.

Attacks on the oil industry in the Niger Delta had already shut down 455,000 barrels per day in crude production, nearly 20 percent daily output in Africa's biggest oil producer.

The market was also looking to the U.S. weekly oil supply snapshot due out Wednesday.

Gasoline stocks likely dropped by 300,000 barrels, while distillate stocks may have fallen by 1.32 million barrels, according to 10 analysts surveyed by Dow Jones Newswires. Crude inventories may have risen by 635,000 barrels in the week ended Feb. 24, they said.

Also aiding the rise in crude prices were gains by gasoline futures, which tend to rise from early March through the middle of May as traders price in expectations of supply snags ahead of the peak summer driving season.

Having fallen hard recently in response to swelling inventories, gasoline futures may be in for an even bigger seasonal rally, analysts say.

Among factors contributing to a gasoline price spike this spring is the phase-out of the controversial additive MTBE from the United States' gasoline supply.

The U.S. Environmental Protection Agency said in February that states no longer have to add methyl tertiary butyl ether to gasoline to fight pollution. MTBE, introduced to help reduce air pollution, has been found to pollute water supplies when it leaks into the environment.

In a recent report, the U.S. Energy Information Administration warned that the many changes refiners need to undertake for the transition to gasoline blended with ethanol -- which also adds oxygen to the fuel -- may "give rise to local imbalances between supply and demand and associated price surges during the change."

Oil Prices Rise Above $62 a Barrel on Geopolitical Threats to Global Supplies

LONDON (AP) -- Crude-oil futures rose Thursday as traders focused on Nigeria and other geopolitical threats to oil supplies, despite U.S. government data that showed growing inventories.
Light, sweet crude for April delivery rose 74 cents to $62.71 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Brent crude for April was up 76 cents at $63.21 a barrel on London's ICE Futures exchange.

Gasoline futures rose more than a cent to $1.6400 a gallon, while heating oil gained nearly two cents to $1.7650 a gallon. Natural gas climbed nearly 5 cents to $6.780 per 1,000 cubic feet.

Crude-oil prices continue to be supported by supply fears tied to threats such as Iran's standoff with the international community over its nuclear program and recent militant attacks on the oil industry in Nigeria.

European and Iranian negotiators were meeting this week in a new effort to defuse tension over Tehran's insistence on running a program that the U.S. and Europe fear could be used to make nuclear weapons.

The meetings come just three days ahead of an International Atomic Energy Agency board meeting. The board's recommendation to the U.N. Security Council, which has the power to impose sanctions, will likely help determine its immediate course of action on Iran.

On Wednesday, militants in Nigeria who kidnapped nine foreign oil workers on Feb. 18 released six but kept two Americans and one Briton. The militants, who want a greater share of oil wealth, also threatened new attacks aimed at cutting off all oil production in Nigeria.

Edmund Daukoru, the Nigerian oil minister and the president of the Organization of Petroleum Exporting Countries, said once the hostages are released, 75 percent of the lost production can be resumed within two weeks.

Attacks on the oil industry in the Niger Delta had already shut down 455,000 barrels per day in crude production, nearly 20 percent of the country's daily output of 2.5 million barrels per day.

Those factors were overshadowing Wednesday's weekly supply report from the U.S. Department of Energy saying domestic oil inventories grew by 1.6 million barrels last week to 328.3 million barrels, or 9 percent above year-ago levels.

Gasoline inventories rose a modest 300,000 barrels to 225.9 million barrels, putting them marginally above year-ago levels.

The nation's supply of distillate fuel, which includes diesel and heating oil, declined by 1.5 million barrels to 134.1 million barrels, or 14 percent higher than a year ago.

Daukoru said Wednesday he sees no problem with prices above $60 a barrel so long as the global economy continues to grow. "A fair price is what the market can sustain."

However, when prices approach $70 a barrel "everybody gets nervous," said Daukoru.

He declined to speculate on whether the cartel would curtail production at its meeting next week in Vienna, but said he was concerned about an "overhang" of supply, meaning refining capacity wouldn't be able to handle the larger oil supply.

Militants Vow New Attacks to Cut Nigeria Oil Exports by 1 Million Barrels Daily in March

LAGOS, Nigeria (AP) -- Militants threatened more attacks on Nigeria's oil facilities and vowed Sunday to cut daily oil exports by 1 million barrels, adding to concerns for OPEC as it prepares for a strategy meeting this week.
Oil is already more $60 a barrel, and the markets are nervous about potential disruptions to the supply from this OPEC member, which is African's largest producer of crude oil.

A.F. Alhajji, an energy analyst in the United States, said the Organization of Petroleum Exporting Countries was unlikely to trim the cartel's overall output when it meets Wednesday because of worries about the unrest in Nigeria's oil region and Iraq's crippled production.

In attacks on Nigerian pipelines and oil facilities, the Movement for the Emancipation of the Niger Delta has reduced the country's production by 455,000 barrels a day. Nigeria normally exports 2.5 million barrels daily.

"Our target for the month of March is a further cut of 1 million barrels," the insurgent group said in an e-mail to The Associated Press.

The group claims to be fighting for the interests of Niger Delta's people, who remain impoverished while the Nigerian government benefits from the region's oil wealth. The group threatens to escalate the conflict by attacking international oil tankers in Nigerian waters.

"We are going to inflict one huge, crippling blow on the Nigerian oil industry and a most embarrassing attack on the Nigerian government," the e-mail said.

Attacks since January have helped push edgy oil prices higher on international markets. In its last attack, on Feb. 20, the militants destroyed a Shell-operated pipeline.

However, a warmer-than-usual winter in the United States, the world's largest consumer, has helped ease some of that pressure on prices.

On Wednesday, OPEC's 12 nations will set production targets for the spring, a period of traditionally lower demand for oil, coming between winter's heavy use of heating oil and summer's high demand for gasoline.

Venezuelan Oil Minister Rafael Ramirez is urging production cuts in anticipation of lesser demand. But analysts are betting the cartel will keep total output unchanged because of concerns about rising gasoline prices, Nigeria's instability and threats to Middle Eastern pipelines.

The Paris-based International Energy Agency estimates global demand could be nearly 2 million barrels a day lower in the second quarter than in the first three months of the year as winter gives way to warmer weather.

In the Nigerian Delta turmoil, ethnic Ijaw militants took nine foreign oil workers hostage Feb. 18 and released six of them last week. On Sunday, the militants said they had no plans to release the remaining three -- two Americans and one Briton.

The militants want President Olusegun Obasanjo's government to release two free prominent Ijaws -- an insurgent leader accused of treason and a former regional governor held on corruption charges after he fled money laundering charges in Britain.

They also want the government to increase their region's share of oil wealth. The Ijaws, who number between 8 million and 12 million, are the dominant tribe in the Niger Delta.

Crude Futures Fall Ahead of IAEA Meeting on Iran

SINGAPORE (AP) -- Oil prices declined Monday in Asian trading amid expectations that Iran's oil output won't be affected by the U.N. nuclear watchdog's meeting later in the day on Tehran's nuclear ambitions.
Light, sweet crude for April delivery fell 17 cents to US$63.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 31 cents to settle at US$63.67 a barrel Friday-- its highest settlement price since Feb. 6.

Brent crude futures on London's ICE Futures exchange slipped 9 cents to US$64.09 a barrel.

The International Atomic Energy Agency will hold a board meeting Monday on Iran, the No. 2 oil producer in OPEC. The board's recommendation to the U.N. Security Council, which has the power to impose sanctions, will likely help determine its immediate course of action.

"People are watching the IAEA meeting, but it has already been factored in," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures. "We don't expect that Iran would cut production or exports."

Iran has insisted it wants uranium enrichment only to generate electricity, not for nuclear arms, but the United States and its allies have argued that this is not the case.

Emori said the market was choosing to focus on Wednesday's meeting of the Organization of Petroleum Exporting Countries, which is unlikely to trim its overall output despite worries about the unrest in Nigeria's oil region and Iraq's crippled production.

Meanwhile on Sunday, militants threatened more attacks on oil facilities in Nigeria, Africa's largest producer of crude oil, and vowed to cut daily oil exports by 1 million barrels.

In attacks on Nigerian pipelines and oil facilities, the Movement for the Emancipation of the Niger Delta has reduced the country's production by 455,000 barrels a day. Nigeria normally exports 2.5 million barrels daily.

"Our target for the month of March is a further cut of 1 million barrels," the insurgent group said in an e-mail to The Associated Press.

Nymex gasoline futures fell 1.46 cents to US$1.7285 a gallon (3.8 liters) while heating oil dipped 1.14 cents to US$1.8014 a gallon.

Natural gas declined 14.1 cents to US$6.649 per 1,000 cubic feet.

LONDON (AP) -- Crude-oil futures held above $60 a barrel in European trading Thursday after OPEC's president said the group will keep output unchanged and figures showed a sharp rise in U.S. oil stocks last week.
Light, sweet crude for April delivery on the New York Mercantile Exchange rose 25 cents to $60.27 a barrel in electronic trading in Europe. The contract on Wednesday fell $1.56 to settle at $60.02 a barrel.

The Nymex crude contract has fallen more than $3 a barrel since Friday's settlement price of $63.67.

April Brent crude futures on London's ICE Futures exchange rose 45 cents to $60.48 a barrel.

Gasoline rose marginally to $1.6567 a gallon while heating oil gained 0.84 cent to $1.7025 a gallon.

Natural gas gained 3.1 cents to $6.679 per 1,000 cubic feet.

Edmund Daukoru, Nigeria's oil minister and president of the Organization of Petroleum Exporting Countries, said Wednesday output would remain unchanged but that the cartel would monitor it closely between now and its next meeting in Venezuela on June 1.

Meanwhile, the U.S. Department of Energy's Energy Information Administration on Wednesday said U.S. crude stocks rose by 6.8 million barrels in the week ending March 3 to 335.1 million barrels -- the highest level since 1999.

The increase was attributed to a rise in imports and a fall in refinery use due to seasonal maintenance, which created a back up.

The EIA also said gasoline inventories fell by 1.1 million barrels to 224.8 million barrels and distillate fuel inventories -- which include heating oil and diesel -- fell by 2.7 million barrels to 131.4 million barrels. Both remain above the upper end of the average range for this time of year, the EIA said, but gasoline stocks are now 0.5 percent below year-ago levels and gasoline demand is 2.5 percent higher.

Meanwhile, markets are worrying about the nuclear ambitions of Iran, the second-largest producer within OPEC.

Tehran on Wednesday threatened the United States with "harm and pain" if it tried to use the U.N. Security Council -- which has the power to impose sanctions -- as a lever to punish Tehran for its suspect nuclear program.

An increasing number of countries have come to share the U.S. view that Tehran is seeking to develop atomic weapons, but Tehran claims its nuclear program is peaceful and only aimed at generating electricity.

Iran's minister of petroleum, Sayed Kazem Vaziri Hamaneh, insisted that the Islamic republic would not cut back on or halt its oil exports.

Oil Prices Fall Below $60 Per Barrel As Traders Take Profits Ahead of Weekend

NEW YORK (AP) -- Crude oil prices slipped below $60 a barrel Friday as traders took profits ahead of the weekend, but worries about violence in Nigeria and the possibility of U.N. sanctions against Iran still underpinned the market.
Light, sweet crude for April delivery fell 51 cents to settle at $59.96 a barrel on the New York Mercantile Exchange -- its lowest settlement price since Feb. 17, when the contract settled at $59.88. Crude futures have fallen nearly 6 percent this week from last Friday's settlement price of $63.67.

Gasoline fell 3.2 cents to settle at $1.6881 a gallon on Friday, a day after gaining almost 7 cents. Heating oil fell 3.54 cents to settle at $1.6846 a gallon, while natural gas rose 4.5 cents to settle at $6.646 per 1,000 cubic feet.

"We're seeing a lot of profit-taking in products -- heating oil and gasoline -- ahead of the weekend," said Alaron Corp. analyst Phil Flynn.

Gasoline futures had rallied Thursday on expectations that inventories would be drawn down as refineries in the United States reduce output while undergoing spring maintenance.

The U.S. Energy Information Administration reported Wednesday that commercial gasoline stocks fell 1.1 million barrels to 224.8 million barrels last week as refiners lowered utilization by 2.2 percentage points to a relatively low 83 percent of operating capacity.

Gasoline futures have seen especially big swings this season, as many states are banning the gasoline additive MTBE, a ground pollutant, and gasoline contracts will eventually have to phase it out.

"This is going to be the most confusing rollover in the history of the gas market," Flynn said.

Still, oil markets are on edge over militant attacks on oil facilities from the Middle East to Nigeria and the confrontation over Iran's nuclear program.

"I believe the market is a lot closer to a bottom than to a top," Flynn said. "I doubt you'll see the market fall too far."

Kuwaiti oil minister Sheik Ahmed Fahd Al Ahmed Al Sabah has said he believes political turmoil and extremism have added $5 to $8 to the price of a barrel of oil.

European Union foreign ministers took stock Friday of international efforts to get Iran to resolve concerns over its nuclear program, an issue that is raising the prospect of U.N. sanctions against Tehran.

Iran, the No. 2 producer within the Organization of Petroleum Exporting Countries, says its program is aimed at generating energy, while the United States contends that Tehran is working toward a nuclear weapon.

In Nigeria, a militant group holding three foreign oil workers hostage said its fighters clashed with army troops this week in the country's oil-rich Delta.

The militants said in an e-mail statement that one of their vessels was attacked Wednesday on the Escravos River by four Nigerian navy patrol boats, sparking a 45-minute gun battle they claimed left seven government soldiers dead.

Recent attacks by militants on Nigerian pipelines and oil facilities have left the country's production still down by about 400,000 barrels a day. Analysts said the renewed violence dampened hopes that Nigerian production can soon return to normal.

Lawsuit Aims to Stall Bush Administration's Opening of Alaskan Area to Oil and Gas Development

ANCHORAGE, Alaska (AP) -- Environmental groups are suing the Interior Department to block expanded oil and gas exploration in an ecologically sensitive area of Alaska's North Slope.
The 18-page lawsuit filed Friday in U.S. District Court in Juneau focuses on the government's decision in January to allow drillers to lease previously closed acreage in the northeast corner of the National Petroleum Reserve-Alaska.

The Bush administration's decision opens up 389,000 acres for leasing, giving drillers a chance to find and produce an estimated 2 billion barrels of oil and 3.5 trillion cubic feet of natural gas in the tundra north and east of Teshekpuk Lake.

The plaintiffs contend the Bureau of Land Management, an Interior agency, violated the Endangered Species Act and other federal laws in failing to properly analyze the potential impacts of oil and gas activity in a region that is a magnet for thousands of migratory geese.

They contend the agency paid inadequate attention to the potential for industrial sprawl that could chop up an Arctic haven for animals of great importance to subsistence hunters.

The bureau said its leasing plan includes protections for the region's wildlife, including migratory black brant, threatened spectacled and Steller's eiders and caribou.

Henri Bisson, the bureau's Alaska chief, said he couldn't comment because he hadn't read the lawsuit. He said the agency is confident it can lease the land and protect wildlife. The agency plans to hold a lease sale in late September, according to Jody Weil, a BLM spokeswoman.

The government in 1923 set aside the 22 million-acre National Petroleum Reserve-Alaska for its oil and gas resources. It is located west of the Prudhoe Bay oil field.

The groups suing are the National Audubon Society, Alaska Wilderness League, Center for Biological Diversity, Natural Resources Defense Council, Northern Alaska Environmental Center, Sierra Club and The Wilderness Society.

Defendants include outgoing Interior Secretary Gale Norton, who resigned Friday.

Oil Prices Jump As Concerns About Nigeria, Iran Outweigh Optimism on Rise in Global Inventories

LONDON (AP) -- Oil prices rose Monday as lingering concerns about unrest in Nigeria and the possibility of U.N. sanctions against Iran outweighed optimism on the rise in global inventories.
A snowstorm in the upper Midwest of the U.S. also lent support to prices on expectations that home-heating demand would rise.

Light, sweet crude for April delivery climbed $1.81 to settle at $61.77 a barrel on the New York Mercantile Exchange.

"The market doesn't seem to want to go below $60 a barrel and it's having a hard time going above $70 a barrel," said oil analyst Phil Flynn of Alaron Trading Corp. in Chicago. "The question is, which way do we break out?"

On London's ICE Futures exchange, Brent crude for April traded 52 cents higher at $61.35 a barrel.

Gasoline futures rose 5.52 cents to finish at $1.7433 a gallon. Heating oil futures gained 5.32 cents to end at $1.7378 a gallon, while natural gas futures rose 36.1 cents to settle at $7.007 per 1,000 cubic feet.

Despite nagging supply worries because of unrest in Nigeria and Iran's nuclear standoff with the West, brokers say strong fundamentals could start to drag prices lower with U.S. crude and product stocks at multiyear highs.

Gasoline futures had rallied last week on expectations that inventories would be drawn down as refineries in the United States reduce output while undergoing spring maintenance.

The U.S. Energy Information Administration reported last week that commercial gasoline stocks fell 1.1 million barrels to 224.8 million barrels as refiners lowered utilization by 2.2 percentage points to a relatively low 83 percent of operating capacity.

But the EIA said U.S. crude stocks rose by 6.8 million barrels to 335.1 million barrels in the week ended March 3 -- the highest level since 1999.

Sucden Commodity brokers said oil prices are likely to remain volatile because of anxiety about potential supply disruptions due to Iran's nuclear dispute and violence in Nigeria's oil delta.

Kuwaiti oil minister Sheik Ahmed Fahd Al Ahmed Al Sabah has said he believes political turmoil and extremism have added $5 to $8 to the price of a barrel of oil.

Iran, the No. 2 producer within the Organization of Petroleum Exporting Countries, ruled out a Russian proposal aimed at easing tensions over its nuclear program.

Iranian Foreign Ministry spokesman Hamid Reza Asefi also warned on Sunday that Iran is considering large-scale uranium enrichment at home as a response to the International Atomic Energy Agency's decision to refer Tehran to the Security Council for possible trade sanctions.

Iran says its nuclear program is aimed at generating energy, while the United States contends that Tehran is working toward developing a nuclear weapon.

In Nigeria, recent attacks by militants on pipelines and oil facilities have left the country's production down by about 400,000 barrels a day.

Oil Prices Drop Below $63, Gasoline Futures Pull Back Slightly

VIENNA, Austria (AP) -- Crude oil prices dropped below $63 a barrel Wednesday and gasoline futures slipped nearly 2 cents a gallon after surging nearly 7 percent a day earlier on word of a large refinery snag.
The retreat came ahead of the release of U.S. figures later in the day expected to show a rise in oil stocks but declines in gasoline and heating oil supplies.

Light, sweet crude for April delivery on the New York Mercantile Exchange dropped 37 cents to $62.73 a barrel in electronic trading by midday in Europe. Gasoline futures fell by nearly 2 cents to $1.8485 a gallon.

Heating oil futures slid more than 2 cents to $1.7957 a gallon.

On the ICE Futures exchange in London, Brent crude slipped 26 cents to $63.71.

On Tuesday, gasoline futures rose 12.27 cents to $1.866 a gallon on the Nymex. Brokers said the rally was sparked after Amerada Hess Corp. said that over the weekend it unexpectedly shut a gasoline producing unit at a refinery in St. Croix that it co-owns with Petroleos de Venezuela SA. The company said repairs to the unit, which refines roughly 150,000 barrels of crude per day, could take up to two weeks.

Refiners are also approaching the turnaround season when they shut down their plants to perform maintenance ahead of summer, which is traditionally the busiest period for gasoline production. It often causes supplies to tighten and prices to rise.

Vienna's PVM Oil Associates forecast that gasoline stocks would fall by 1.3 million barrels due to declining imports, distillate stocks would decline by 1.6 barrels and crude would rise by 2.3 million barrels. The weekly snapshot is produced by the U.S. Department of Energy's statistical arm, the Energy Information Administration.

On Tuesday, the International Energy Agency, a watchdog for the world's energy consumers, lowered its 2006 oil demand estimate by 290,000 barrels per day. The IEA attributed the lessened forecast demand to persistently high fuel prices and slowing consumption in Southeast Asia.

Unrest in Nigeria and the possibility of U.N. sanctions against Iran, the No. 2 producer within OPEC, for its nuclear ambitions continue to support prices.