Updated from 1:18 p.m. EDT

Oil futures dipped Friday after a tropical storm sputtered out in the Caribbean and forecasters shaved their hurricane outlook for the year. A lower-than-expected jobs report also fueled fears that economic growth would slow, cutting demand for crude.

Tropical Storm Chris lost strength in the Caribbean, easing concerns that it would become the first hurricane of the season. Traders have been fretting this week that Chris would strengthen and head toward the Gulf of Mexico, where a quarter of the country's petroleum industry is located.

University of Colorado researchers cut their estimate for hurricanes this season from 17 tropical storms to 15. Their outlook now calls for seven hurricanes, down from nine. Instead of five Category 3 hurricanes, which have a minimum wind speed of 111 miles per hour, the prognosis calls for three.

Last year, there were 15 hurricanes and seven major storms, one of which was Hurricane Katrina. That storm shut down much of the Gulf Coast's oil and natural gas production, driving prices up to levels not seen since the oil crisis of the early 1980s.

The U.S. economy only created 113,000 jobs last month, fewer than the 121,000 created in June, according to the Labor Department. Analysts had expected businesses to generate 145,000 positions. Unemployment also rose to 4.8%, up from 4.6%.

Light, sweet crude shed 70 cents to $74.76 a barrel on Nymex. Wholesale gasoline lost 6 cents to $2.23 a gallon and heating oil sagged 2 cents to $2.08 a gallon.

Receding hurricane fears and hot weather drove down natural gas prices by 4 cents to a close of $7.24 per million British thermal units. This week, natural gas futures stole the spotlight from crude as a heat wave gripped much of the country and Tropical Storm Chris threatened to charge towards the Gulf of Mexico and hit oil installations. Natural gas, which is used by some utilities to generate electricity, hit a high of $8.21 per million British thermal units on Monday.

Earlier this morning, oil prices staged a minor rally in London on news that four expatriate oil workers were kidnapped by gunmen in Nigeria. Rebels have blown up pipelines and attacked oil platforms in Africa's largest crude producer, shaving output by around a quarter of total production.

The attacks have had an outsized effect on

Royal Dutch Shell

(RDS-A)

, which has lost around 630,000 barrels of crude per day. In a conference call last week, executives said output for the rest of the year would likely not return to full capacity.

Although oil prices have been skyrocketing this year on geopolitical conflicts and supply problems, traders were largely shrugging off the escalation in fighting between Israel and Hezbollah. Israel extended its bombing campaign in Beirut and called for its army to advance deeper into Lebanon. Hezbollah increased its rocket barrage of Israel, with its leader, Hassan Nasrallah, vowing to target Tel Aviv if Israeli air raids continue.

More than 500 people have been killed in the conflict -- which was sparked by Hezbollah's kidnapping of two Israeli soldiers -- and over 500,0000 people displaced, according to the

Associated Press

and the United Nations.

Oil prices rise and fall on real or perceived threats to global supplies because there is less and less of it. The world now consumes around 85 million barrels of crude per day, and while producers can accommodate the demand, there is little left over for any spikes in consumption.

However, energy companies from multinational oil drillers to small oilfield service companies have been basking in high energy profits and raking in some of their highest earnings ever. So far,

Exxon Mobil

(XOM) - Get Report

has been the best example of the tremendous oil revenues, posting its second-highest quarterly profit ever last week of $10.3 billion.

But not all energy companies fared as well.

Occidental Petroleum

(OXY) - Get Report

reported Friday that net income in the second quarter plunged 44% to $857 million, or $1.97 a share. Earnings included an after-tax charge of $347 million for discontinued operations and Ecuador's termination of the oil driller's operation of Block 15, which accounted for 7% of its global production.

However, sales rose from $3.4 billion last year to $4.6 billion, thanks to high oil prices. Shares were recently declining $1.95, or 1.8%, to $104.99.