Crude prices fell Friday after good news about supply from the United States and Russia and lack of negative news from global tension points brought prices down from brief highs over $70.
Prices were initially spurred higher by concern over oil-rich Iran. U.S. and European officials in Vienna urged Tehran on Thursday to freeze uranium enrichment and stop withholding information about its nuclear program. The chief U.S. delegate to the International Atomic Energy Agency, Gregory L. Schulte, warned that if Iran remained defiant it could face "the weight of the Security Council."
Iran's supreme leader Ayatollah Ali Khamenei said his country "will not succumb to these pressures." But the chief Iranian delegate to the IAEA, Ali Ashgar Soltanieh, said they were prepared to negotiate.
After rising above $70 in earlier trading, light sweet crude for July delivery fell 40 cents to $69.10 a barrel in midday trading Friday on the New York Mercantile Exchange. August Brent crude on London's ICE Futures exchange fell 37 cents to $68.08 per barrel.
"The market's really waiting for Iran's response," to an international offer of incentives in return for talks, said David Thurtell, commodity strategist with the Commonwealth Bank of Australia in Sydney. "More conciliatory remarks from both Iran and the U.S. will definitely ease the market."
Positive supply news came this week from Russia and the United States.
PVM Oil Associates in Vienna said Russian oil exports will likely rise by around 5 percent in the third quarter while oil company BP PLC was expecting production at the Thunder Horse and Atlantis oil fields in the Gulf of Mexico would start on time in the second half of this year after initial fears of delays.
In London, David Dugdale of MFC Global Investment Management said "a slower global economy could put downward pressure on oil prices later in the year.
"On the other hand, the oil markets seem more preoccupied for now with supply disruptions, both real (Nigeria) and feared (Iran and the hurricane season in the Gulf of Mexico)," he said.
Militants in Nigeria are hindering output by some 500,000 barrels a day, about 20 percent of the African nation's usual daily production.
Oil prices were also boosted by natural gas futures, which surged more than 9 percent after the U.S. government reported that natural gas storage grew less than market-watchers had anticipated.
The threat of hurricane season and unseasonably high temperatures in some parts of the United States are raising expectations for high gas and power demand in the coming months. Still, natural gas supply is at its highest level ever for this time of year.
Natural gas futures fell nearly 9 cents Friday to $7.12 per 1,000 cubic feet.
Gasoline futures fell more than 4 cents to $1.9975 a gallon, while heating oil prices fell 1.69 cent to $1.92 a gallon.
The average U.S. price of a gallon of regular, unleaded gasoline has been slow to pull back, edging slightly lower to $2.891 Friday - down half a cent from a day earlier, and down nearly 4 cents from a month ago, according to AAA's daily fuel gauge report.
On Thursday, OPEC's secretary general, Sheik Ahmed Fahd Al Ahmed Al Sabah of Kuwait, said the Organization of Petroleum Exporting Countries won't cut its current output ceiling until oil prices stabilize. But this move might not be sufficient to curb price pressures.
"We need to see much better growth in OPEC's supplies, otherwise supply's not going to keep up with world demand," said Thurtell. "The market's vulnerable to supply outages, whether they come from hurricanes or civil strikes."
Prices were initially spurred higher by concern over oil-rich Iran. U.S. and European officials in Vienna urged Tehran on Thursday to freeze uranium enrichment and stop withholding information about its nuclear program. The chief U.S. delegate to the International Atomic Energy Agency, Gregory L. Schulte, warned that if Iran remained defiant it could face "the weight of the Security Council."
Iran's supreme leader Ayatollah Ali Khamenei said his country "will not succumb to these pressures." But the chief Iranian delegate to the IAEA, Ali Ashgar Soltanieh, said they were prepared to negotiate.
After rising above $70 in earlier trading, light sweet crude for July delivery fell 40 cents to $69.10 a barrel in midday trading Friday on the New York Mercantile Exchange. August Brent crude on London's ICE Futures exchange fell 37 cents to $68.08 per barrel.
"The market's really waiting for Iran's response," to an international offer of incentives in return for talks, said David Thurtell, commodity strategist with the Commonwealth Bank of Australia in Sydney. "More conciliatory remarks from both Iran and the U.S. will definitely ease the market."
Positive supply news came this week from Russia and the United States.
PVM Oil Associates in Vienna said Russian oil exports will likely rise by around 5 percent in the third quarter while oil company BP PLC was expecting production at the Thunder Horse and Atlantis oil fields in the Gulf of Mexico would start on time in the second half of this year after initial fears of delays.
In London, David Dugdale of MFC Global Investment Management said "a slower global economy could put downward pressure on oil prices later in the year.
"On the other hand, the oil markets seem more preoccupied for now with supply disruptions, both real (Nigeria) and feared (Iran and the hurricane season in the Gulf of Mexico)," he said.
Militants in Nigeria are hindering output by some 500,000 barrels a day, about 20 percent of the African nation's usual daily production.
Oil prices were also boosted by natural gas futures, which surged more than 9 percent after the U.S. government reported that natural gas storage grew less than market-watchers had anticipated.
The threat of hurricane season and unseasonably high temperatures in some parts of the United States are raising expectations for high gas and power demand in the coming months. Still, natural gas supply is at its highest level ever for this time of year.
Natural gas futures fell nearly 9 cents Friday to $7.12 per 1,000 cubic feet.
Gasoline futures fell more than 4 cents to $1.9975 a gallon, while heating oil prices fell 1.69 cent to $1.92 a gallon.
The average U.S. price of a gallon of regular, unleaded gasoline has been slow to pull back, edging slightly lower to $2.891 Friday - down half a cent from a day earlier, and down nearly 4 cents from a month ago, according to AAA's daily fuel gauge report.
On Thursday, OPEC's secretary general, Sheik Ahmed Fahd Al Ahmed Al Sabah of Kuwait, said the Organization of Petroleum Exporting Countries won't cut its current output ceiling until oil prices stabilize. But this move might not be sufficient to curb price pressures.
"We need to see much better growth in OPEC's supplies, otherwise supply's not going to keep up with world demand," said Thurtell. "The market's vulnerable to supply outages, whether they come from hurricanes or civil strikes."
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