Mild Weather Sends Oil Down

Tehran has said it will continue enriching uranium and held out the possibility of reducing crude exports to the West in response. But it may have problems actually cutting shipments because its economy depends heavily on the billions it receives in oil revenue.

"If necessary, Iran will use any weapon to defend itself," Iranian Oil Minister Kazem Vaziri-Hamaneh told Reuters Tuesday. Iran renewed its nuclear development program earlier this year in violation of a U.N. ban and has steadfastly maintained since then that it has a right to nuclear energy.

Tehran insists it needs a new way to generate electricity for its growing population, while the West believes the program is a cloak for building atomic weapons.

Trading on the Nymex, which was closed on Monday in observance of Christmas, was thin and is likely to remain that way for the remainder of the week. Traders typically don't make big bets at the end of the year.

Much of the energy complex took a cue from crude and declined. Wholesale unleaded gasoline and heating oil each gave back 5 cents to $1.57 a gallon to $1.62 a gallon, respectively.

Brimming fuel supplies and predictions of warm weather dampened natural gas prices by 52 cents, sending them to a three-month low of $6.11 per million British thermal units. The National Weather Service expects above-average temperatures to cover California and the northern part of the U.S. through Jan. 4. Domestic supplies are nearly 10% above the five-year average, according to the latest U.S. Energy Department update.