Oil fell more than a dollar to less than $74 a barrel on Friday, unraveling gains driven by worries about a prolonged cut in Nigerian oil output and violence in the Middle East.
London Brent crude fell $1.51 to $73.50 a barrel and U.S. light sweet crude dropped $1.24 to $73.30 a barrel by 1423 GMT.
Oil major Royal Dutch Shell's Chief Executive Jeroen van der Veer said on Thursday the company did not expect production closed off in Nigeria to make a significant recovery this year.
Shell is losing 653,000 barrels per day (bpd) of the output it operates in Nigeria, most of it because of militant attacks.
Chevron has also reduced exports by 43,000 bpd.
The total amounts to around a quarter of production from the world's eighth biggest exporter.
Profit-taking followed a rise of more than a dollar on Thursday for Brent, which had reacted more strongly than U.S. crude to the concern about Nigeria.
Traders said there was no fresh news behind Friday's sell-off, although weak U.S. GDP data added fuel to bearish sentiment.
"Brent is a direct competitor to Nigerian crude. They are very similar grades," said Deborah White of SG CIB in Paris. "And U.S. crude stocks are more than adequate."
"Nigeria will probably see more disruptions before it gets better because of elections next year," said Craig Pennington of Schroders.
MIDDLE EAST UNDERPINS MARKET
Traders and analysts said that over the past days Nigeria has been a bigger factor for the market than violence in Lebanon, although nagging fears the conflict could draw in some Middle East oil producers have kept the market on edge.
Israel battered Lebanon on Friday, killing 11 people.
Calls have mounted across the world for an end to the war, but U.S. Secretary of State Condoleezza Rice delayed a possible return to the region, suggesting negotiations had not reached a point where she could produce a halt to hostilities.
"She will go when it is the right time," a U.S. official said. "She will go when it is useful."
Oil prices have also been drawing support from strong U.S. gasoline demand, which is 1.8 percent higher than a year ago, despite pump prices of around $3 a gallon in the world's top oil user.
More bearishly, figures released by the U.S. Commerce Department on Friday showed U.S. economic growth had slowed abruptly during the second quarter to a 2.5 percent annualised rate in the April-June quarter, less than half the robust 5.6 percent rate registered in the first quarter.
Slower consumer spending, especially on costly durable goods like new cars, was a key reason.
The second biggest oil consumer China posted surprisingly strong double-digit demand growth in the second quarter, but slowing imports of fuel oil and a trickle of diesel exports could signal more modest increases in coming months, traders said.
In the third largest oil user Japan, where demand has been unusually weak this summer as colder and wetter weather deterred holiday drivers, refiners were set to crank up runs in August after gasoline stocks fell to their lowest in almost two years.
London Brent crude fell $1.51 to $73.50 a barrel and U.S. light sweet crude dropped $1.24 to $73.30 a barrel by 1423 GMT.
Oil major Royal Dutch Shell's
Shell is losing 653,000 barrels per day (bpd) of the output it operates in Nigeria, most of it because of militant attacks.
Chevron has also reduced exports by 43,000 bpd.
The total amounts to around a quarter of production from the world's eighth biggest exporter.
Profit-taking followed a rise of more than a dollar on Thursday for Brent, which had reacted more strongly than U.S. crude to the concern about Nigeria.
Traders said there was no fresh news behind Friday's sell-off, although weak U.S. GDP data added fuel to bearish sentiment.
"Brent is a direct competitor to Nigerian crude. They are very similar grades," said Deborah White of SG CIB in Paris. "And U.S. crude stocks are more than adequate."
"Nigeria will probably see more disruptions before it gets better because of elections next year," said Craig Pennington of Schroders.
MIDDLE EAST UNDERPINS MARKET
Traders and analysts said that over the past days Nigeria has been a bigger factor for the market than violence in Lebanon, although nagging fears the conflict could draw in some Middle East oil producers have kept the market on edge.
Israel battered Lebanon on Friday, killing 11 people.
Calls have mounted across the world for an end to the war, but U.S. Secretary of State Condoleezza Rice delayed a possible return to the region, suggesting negotiations had not reached a point where she could produce a halt to hostilities.
"She will go when it is the right time," a U.S. official said. "She will go when it is useful."
Oil prices have also been drawing support from strong U.S. gasoline demand, which is 1.8 percent higher than a year ago, despite pump prices of around $3 a gallon in the world's top oil user.
More bearishly, figures released by the U.S. Commerce Department on Friday showed U.S. economic growth had slowed abruptly during the second quarter to a 2.5 percent annualised rate in the April-June quarter, less than half the robust 5.6 percent rate registered in the first quarter.
Slower consumer spending, especially on costly durable goods like new cars, was a key reason.
The second biggest oil consumer China posted surprisingly strong double-digit demand growth in the second quarter, but slowing imports of fuel oil and a trickle of diesel exports could signal more modest increases in coming months, traders said.
In the third largest oil user Japan, where demand has been unusually weak this summer as colder and wetter weather deterred holiday drivers, refiners were set to crank up runs in August after gasoline stocks fell to their lowest in almost two years.
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