Oil Falls as Storm Fears Wane

Crude futures eased Tuesday after officials in Saudi Arabia assured traders that Cyclone Gonu, now heading into the Gulf of Oman, wouldn't pose a threat to oil supplies.

The July light sweet crude contract dropped 60 cents to $65.61 a barrel on the New York Mercantile Exchange. Reformulated gasoline lost 3 cents to $2.21 a gallon. The near-term natural gas contract fell 13 cents to $8.06 per million British thermal units.

Also precipitating the decline was a softening of the rhetoric between Russian President Vladimir Putin and U.S. President George Bush.

Putin said on Monday that Russia would likely find new European targets for nuclear missiles if the U.S. continues with its plans to build a missile defense system in Eastern Europe. However, Bush followed those comments by making remarks meant to assure the Russians that they are no longer considered enemies of the U.S.

Meanwhile, energy stocks were mostly lower. The CBOE Oil Index lost 0.6%. ConocoPhillips (COP Quote) and Chevron (CVX Quote) were down fractionally, while Exxon Mobil(XOM Quote) traded up 0.1% to $84.31.

E&P firm Carrizo Oil & Gas (CRZO Quote) announced that it has made two significant discoveries in the North Sea, and its shares rose 1.9% to $42.68.

EV Energy (EVEP Quote) was upgraded by AG Edwards to buy from hold after selling $120 million worth of equity securities to institutional investors. Shares of EV Energy rose 0.5% at $38.18.

Matrix Research downgraded shares of Plains Exploration (PXP Quote) to hold from strong buy, lowering its stock 2.1% to $52.31.