Oil Futures Drift Lower

Despite the modest pullback Thursday, "we see $65 as the next level for crude oil" said George Hopley, energy analyst at Barclays Capital. "Emphasis is switching away from winter temperatures and now focusing on growing demand for gasoline. Gasoline demand is already strong early in the season. This is driving prices higher."

Energy stocks were mostly higher. The iPath Goldman Sachs Crude Oil (OIL Quote) ETF was down 11 cents at $37.57.

Distributed Energy Systems (DESC Quote) was downgraded by Merriman Curhan Ford from buy to neutral after the company announced a fourth-quarter loss of 84 cents a share. Its stock plummeted 30% in the trading session to $1.93.

Among the major producers, Exxon Mobil (XOM Quote) edged up 0.3% to $71.85. Chevron (CVX Quote) was better by 0.2% at $68.46, and ConocoPhillips (COP Quote) added 0.7% to $67.57.