Updated from 12:04 p.m. EDT
Oil resumed a weeklong skid Friday after Fed Chairman Alan Greenspan said high energy prices helped cool off demand growth.
On its last day of trading, the June contract fell 12 cents to $46.80 a barrel on Nymex. Crude closed below $47 a barrel for the first time in three months Thursday. Gasoline futures dropped about 1 cent to $1.419 a gallon.
In a speech before the Economic Club of New York, Greenspan said that high oil prices have dampened demand growth, albiet "only modestly." He reiterated that high inventories, which rose to their highest seasonally adjusted level in three years last week, could "damp the price frenzy."
Still, Greenspan said, the inventory, production, and price outlook will "doubtless continue to reflect longer-term concerns. Much will depend on the response of demand to price over the longer run."
"Prices of spot crude oil and natural gas have risen sharply over the past year in response to constrained supply and the firming of overall demand. But if history is any guide, should higher prices persist, energy use over time will continue to decline relative to gross domestic product," he said.
After suggesting Thursday that production could be trimmed if inventories keep rising, OPEC President Sheikh Ahmad al-Fahd al-Sabah said on Friday that demand growth estimates showed OPEC would not need to cut output at its June 15 meeting,
reported. "There is no need to trim, we will continue at this level," he said.
Sheikh Ahmad also said that OPEC would be happy to see oil prices in the range of $40 to $45 a barrel.
Erik Kreil, who follows OPEC and writes the international short-term oil outlook for the Energy Department, says he does not foresee any production cuts from OPEC this year. "The only time OPEC will initiate disciplinary actions is when prices reach $15 or $20 a barrel. Even at $30 oil they will continue to pump flat out," Kreil said.
Kreil also said that Saudi Arabia is the only country that has any excess capacity -- about 1.5 million to 2 million barrels a day. These are wells that are fully executable and ready for immediate pumping in case of a supply disruption, but are not used. "Only the Saudis have enough money to maintain these spare wells without profiting from them," he said.
Prices have been more than $12 below their April peak, pressured by swelling U.S. inventories. The markets currently are receiving more than 30 million barrels a day from OPEC, the highest influx in about 25 years.
Among oil companies,
was ordered to pay out a previous judgment of about $1.3 billion in restitution for overcharging gas station owners for gasoline over 18 years, the
The original amount awarded to 10,000 retail stations in 2001 was $500 million, which grew to $1.3 billion with interest. Exxon charged dealers a 3% fee on gasoline sales paid by credit cards while promising to offset the charge by lowering the wholesale cost of the fuel. Exxon did that for six months but stopped the offset in 1983 and didn't tell the dealers, the
, the oil and gas exploration and production company, said it is buying West Texas oil assets from Exxon for $972 million. Combined with another potential transaction and two smaller acquisitions in the area done in the first quarter, Occidental's total proved reserve will increase by 130 million barrels of oil equivalent.
The natural gas producer
said it entered a deal to sell its 50% interest in the Korean Independent Energy Corporation that provides 1,800-megawatts of power to Seoul. The company said it was selling assets in order to cut down its outstanding debt to $15 billion by the end of the year. Shares rose 0.61% to $9.84.
, a small, Rockaway, N.J.,-based oil company, jumped more than 50% to $12.34 Friday on strong fiscal third quarter results. The company said it earned $569,461, or 28 cents a share, on sales of $23.7 million, compared to $436,813, or 22 cents a share, on sales of $16.6 million in the same period a year ago.
Shares of most major oil producers dropped Friday. Exxon Mobil fell 1.31%;
declined 0.46%; and