Updated from 1:10 p.m. EDT
Oil futures gained ground Friday after the British navy sent units to protect Saudi Arabia's largest oil export facility from possible attacks.
The Ras Tanura terminal handles most of the kingdom's crude exports and was still operating as normal,
reported. British intelligence received reports of a possible terrorist attack against the terminal. The British naval forces will join Saudi and Bahraini units already patrolling the area.
The threat to Ras Tasnura is being taken seriously because of an attempted bombing of another major Saudi oil facility in February. Saudi forces kept that attack from succeeding by opening fire on three cars of suicide bombers.
Light, sweet crude rose 39 cents to finish trading at $60.75 a barrel on Nymex. Earlier this morning, the contract had been treading water as traders cashed in positions and took profits after the contract hit a three-week high earlier this week.
The rest of the energy sector ignored crude's increase and fell across the board. Wholesale unleaded gasoline gave back 1 cent to $1.55 a gallon.
Milder temperatures and robust supplies helped drag down fuels used for heating, with natural gas losing 34 cents to $7.15 per million British thermal units, and heating oil sheding 1 cent to $1.69 a gallon.
Oil prices have been all over the map in the past week as traders reacted alternatively to a drop in crude supplies last week, indecision over whether OPEC members would follow their 1.2 million barrel production cut and traders cashing in their positions. Crude has traded as high as $61.40 and as low as $58.81 this week, underpinning how volatile the energy markets have become.
Last week, OPEC agreed to trim output starting next month, but several days passed before Saudi Arabia, Iran and the United Arab Emirates said they agreed with it. On Thursday, Libya and Kuwait said they would also decrease exports by 72,000 barrels and 100,000 barrels, respectively.
The energy markets are still unsure whether actual production will decrease next month or if members, anxious to preserve their oil revenue, will cheat and keep pumping at their current levels.
On Wednesday, the U.S. Energy Department reported that oil stockpiles tumbled by 3.3 million barrels last week, thanks in large part to the closure of the Louisiana Offshore Oil Port, one of the country's largest import facilities, for three days. The drop stunned traders, who had been expecting an increase of 2.87 million barrels.
During the autumn, crude inventories typically rise as refiners shutter some units for seasonal maintenance before the winter heating season. Crude is processed into petroleum products such as gasoline and heating oil.
Energy prices will likely rise as the weather grows colder and heating demand rises. But for now, higher-than-average supply levels will keep a lid on price increases. There is 4% to 14% more gasoline, crude and distillates, which include products such as heating oil, than at this time last year.
If the U.N. Security Council imposes sanctions on Iran over its defiance in pursuing nuclear power, energy prices could go higher. Tehran restarted nuclear development activities in February and, despite international opposition, expanded its capacity to enrich uranium this week. Council members are circulating a draft resolution calling for a trade embargo against the world's fourth-largest crude producer and may be forced to act with Tehran's latest move.
Iran has consistently maintained that it needs nuclear power to generate electricity for its growing population. But the West believes otherwise; European and American diplomats are concerned that Tehran wants to build atomic weapons.
Helping boost crude stockpiles worldwide was Norwegian oil company
announcement that its two platforms were back in operation after being shuttered by officials for lifeboat defects. The facilities produce a total of 200,000 barrels per day.
Exploration and refining companies were down 0.5% on the Amex Oil Index, with
Among the majors,
was grabbing much of the attention after reporting a 40% increase in net income during the third quarter. Profits came in at $5 billion or $2.29 a share on higher oil prices and production, thanks to the acquisition of Unocal.
Revenue, however, slipped to $54.2 billion this year, down from $54.4 billion last year.
Chevron shares were recently gaining 0.9% to $68.11.