Mild Weather Sends Oil Down

Crude oil futures slumped Tuesday as warm weather swept across much of the northern U.S. and traders decided that Iran won't follow through on its threat to trim crude exports in retaliation for U.N. Security Council sanctions.

February light, sweet crude lost $1.31 to settle at a two-week low of $61.10 a barrel on the New York Mercantile Exchange. A gasoline pipeline blast in Nigeria, the fifth-largest crude supplier to the U.S., also failed to support higher prices. The explosion killed more than 250 people, many of whom were collecting spilled fuel for use at home.

"Participants will remain watchful, but until Iran actually takes action to cut off oil to the West, buying may be somewhat restrained," wrote Michael Fitzpatrick, an energy analyst with Fimat USA, in a note to clients. "Iran's vitriolic president may also feel restraint coming off recent election returns that show considerable disenchantment with his administration."

On Saturday, after months of deliberations, the U.N. Security Council approved sanctions against Iran over its refusal to end its nuclear program. The sanctions, which restrict Tehran from importing and exporting nuclear equipment and fuel, could be beefed up if Iran chooses to flout them.

"If necessary, we will not hesitate to return to this body for further action if Iran fails to take steps to comply," Alejandro D. Wolff, the acting U.S. ambassador to the U.N., told The New York Times.