Oil Drops Below $76

Crude futures were sharply lower in Friday's trading session at the New York Mercantile Exchange and fell below $76 a barrel.

September West Texas intermediate crude shed $1.49 to $75.37 a barrel. Reformulated gasoline was unchanged at $2.04 a gallon, and heating oil was off 2 cents at $2.05 a gallon.

Natural gas was flat at $6.10 per million British thermal units.

Crude spiked near $77.30 before the Nymex trading session started on news that gunmen attacked two boats in the Nigerian delta region. However, prices were pulled downward as soon as morning trading began.

According to Brandon DiTullio, a commodities broker at Nextsource Trading, crude is being withdrawn from storage to sell in the open market because the futures curve is currently backwardized. This is depressing the price of the near-term crude contracts.

Meanwhile, energy stocks were mixed. The CBOE Oil Index lost 1.6% to 731.15. ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) fell 1.2% to $79.31. Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks) slid 1.5% to $83.91.

Among ratings changes, St. Mary Land & Exploration (SM Quote - Cramer on SM - Stock Picks) was upgraded to buy from hold by Keybank Capital Markets, sending its shares up 2.8% to $33.84.

Transocean (RIG Quote - Cramer on RIG - Stock Picks) was upgraded by Wachovia to outperform from market perform. However, the company's shares fell 1.9% to $101.98.

Sempra (SRE Quote - Cramer on SRE - Stock Picks) was upgraded by Jefferies & Co. to buy from hold, lifting its stock 1.4% to $55.57.

OneOK Partners (OKS Quote - Cramer on OKS - Stock Picks) was upgraded by Citigroup to hold from sell. Its shares were down fractionally at $62.95.