Updated from 12:36 p.m. EDT
Crude prices fell Friday after the International Energy Agency trimmed its forecast for world oil demand, citing rising energy prices.
Light, sweet crude for June delivery lost $1.28 to close at $72.04 a barrel. Unleaded gasoline was declined 4 cents to $2.17 a gallon.
The release of three oil workers in Nigeria who had been kidnapped on Thursday, and positive comments from Iran's president, also helped reverse recent gains. Mahmoud Ahmadinejad said Friday Iran would follow any U.N. decision regarding its nuclear program so long as it conforms with international rules.
Losses were reduced by reports of a pipeline explosion in Nigeria that may have killed up to 200 people. Before the explosion, locals were scavenging fuel from the ruptured pipeline. Oil is often stolen from pipelines for personal consumption or to e sold, the
On Friday, Venezuelan President Hugo Chavez said the government may boost its stake in heavy oil projects operated by oil giants like
. The state-run oil company, Petroleos de Venezuela, already holds minority stakes in four projects in the oil-rich Orinoco River Basin. Chavez's comments came on the heels of a report released Thursday by the Venezuelan Congress that recommended the state seek majority control of the fields.
Such a move would bring all of Venezuela's oil operations under state control and would seal Chavez's campaign to renationalize the country's oil industry. Already, the government has taken over 32 privately run fields, increased royalties and taxes and renegotiated contracts.
Crude rose 5% over the previous three sessions on concern there isn't enough gasoline to meet demand during the summer driving season. Refiners have been running at lower rates because they've been switching over to summer blended gasoline and phasing out an oxygenate additive for ethanol as mandated by the government.
Sparked by higher gasoline prices, ongoing supply problems in Nigeria, and an impasse over Iran's nuclear program, crude prices have risen 20% this year. Economic sanctions have been toyed with as a measure to punish Iran, the world's fourth-largest crude producer, for restarting nuclear development. Skyrocketing demand from China and India and a growing U.S. economy have cut supplies and sent prices soaring.
Despite strengthening economies, the International Energy Agency reduced its global demand forecast for 2006 as high energy prices cut consumption. This year, the group, which advises nearly 30 countries on energy policy, trimmed its estimate for demand growth by 220,000 barrels to 1.25 million barrels per day.
The Paris-based group also revised down world consumption of OPEC crude by 200,000 barrels to 29.2 million barrels per day for the year.
High crude prices have boosted first-quarter profits at many of the big oil companies. Earnings rose 49% at
, 15% at
and 12% at
profits jumped 7% and
Royal Dutch Shell
posted a 3.1% gain.
On Friday, energy shares and heating fuels followed crude lower. Natural gas closed off 37 cents at $6.28 per million British thermal units and heating oil dipped 5 cents to $2.04 a gallon.
The Philadelphia Oil Service Index was down 3% and the Amex Oil Index was losing 2%. The biggest losers were