Updated from 11:14 a.m. EDT

Oil prices retreated from $75 on Monday after OPEC's promise to keep pumping at record levels.

Light, sweet crude for June delivery slipped $1.84 to close at $73.33 a barrel on Nymex. Declines might have been greater, but OPEC, which pumps over a third of the world's crude, refused to raise its production from current levels.

A simmering dispute with Iran over its nuclear ambitions and reduced Nigeria oil shipments have buoyed crude prices in advance of the summer driving season. After a two-year hiatus, Iran restarted uranium enrichment in February in defiance of Western threats of military strikes and economic sanctions and has refused to cease operations.

Iran is the world's fourth-largest crude producer and pumps 4 million barrels per day. Iran's oil minister, Kazem Vaziri Hamaneh told the

Associated Press

on Sunday that Tehran will not slash exports, but those comments, and others in the past month, have not reassured the markets.

Oil prices will probably remain volatile until Friday, when the U.N. Security Council meets to discuss Iran's nuclear ambitions. If the country refuses to cease its nuclear development activities, the U.S. and Great Britain have said they would press for sanctions. Iran's Foreign Ministry spokesman said on Sunday, though, that research would continue.

A 25% drop in Nigerian crude exports has also kept energy prices high. Nigeria is the fifth-largest oil supplier to the U.S. and has become increasingly important as the U.S. moves away from its reliance on Middle Eastern crude. Rebels have blown up pipelines and attacked platforms, trimming Nigerian output by 500,000 barrels per day, in a bid to destabilize the central government and win a share of the country's oil wealth.

It's unclear when production will resume because militants have rejected a government plan to increase development in the Niger River delta and have vowed to increase their campaign of violence. Officials from

Royal Dutch Shell

( RDS-A), which has felt the brunt of the attacks, said Friday that security problems have stalled the company's efforts to restart 455,000 barrels a day of curtailed production.

Venezuelan President Hugo Chavez, who has raised royalties and taxes and taken over fields from petroleum companies, is reportedly planning to expand his campaign to re-nationalized the country's oil industry, according to the

Wall Street Journal

. Venezuela's Congress is looking at raising royalties and taxes on foreign companies operating in the country's Orinoco River basin. Any changes could take months, but a move would likely happen before the country's December elections.

Increased taxes and royalties have the potential to crimp companies such as

ConocoPhillips

(COP) - Get Report

,

Exxon Mobil

(XOM) - Get Report

and

Total S.A.

(TOT) - Get Report

hard and may result in billions of dollars in profits, the newspaper said. Already, Total and

Eni

(E) - Get Report

have each lost oil fields to the government's recent takeover of 32 privately-run oil fields, and will likely not receive compensation for them, the country's oil minister said.

Although there are plenty of crude supplies to cover any short-term disruptions, with inventories 7% above last year, geopolitical problems have whipped up the energy markets. Analysts have said these fears have added as much as $15 to the price of oil, in what they term a "risk premium."

OPEC ministers said as much at an energy conference in Qatar this weekend, and refused to increase output to drive down prices.

"OPEC can deal with issues it can control but ... we can't do anything about the politics in the world," Algerian Oil Minister Chakib Khelil told

Reuters

at an energy conference in Qatar on Friday. "The market would see through that. If we do something, it has to be credible. Why should we hide the truth?"

The group has been pumping 28 million barrels per day and has an extra 2 million barrels in daily spare capacity.

U.S. Energy Secretary Samuel Bodman said he would not try to persuade the oil-producing group to provide more oil.

"We have encouraged producing nations to keep oil markets well supplied -- I think they've done that," Bodman told

Reuters

on Monday.

Opinion has been divided over how to bring down energy prices. Consuming nations have said more money has to be invested in raising production, while OPEC members say they have increased output 10% since 1999 and need the U.S. to build more refineries. The last refinery built in the U.S. was 30 years ago, and efforts to build new ones have run into staunch public opposition.

High crude prices have boosted other commodity futures. Wholesale gasoline is up 23% this year on speculation there won't be enough of the fuel to meet peak demand during the summer driving season. Refiners are busy draining their tanks of gasoline with methyl tertiary butyl ether, an additive linked to water pollution, so they can make room for gasoline blended with ethanol. On May 5, refiners lose their protection against MTBE lawsuits.

Wholesale gasoline lost 6 cents to close at $2.17 a gallon.

Warming temperatures and robust stockpiles were driving down prices for heating fuels. Natural gas declined 42 cents to settle at $7.56 per million British thermal units, and heating oil dipped 4 cents to finish at $2.03 a gallon.

Energy stocks followed crude prices lower, with the Amex Oil Index dipping 1.1%, the Philadelphia Oil Service Index, which tracks 15 oil service companies, falling 1.3%, and the Amex Natural Gas Index declining 1.4%.

Plains Exploration and Production

(PXP)

said it would buy

Stone Energy

(SGY)

in a $977 million stock swap. Under the deal, Plains will issue 34.5 million shares, assume $483 million in debt and swap 1.25 shares for every Stone share.

Plains stock dropped $3.45 to $38.52, while Stone gained $1.09 to $48.19.

Shares of

Valero LP

( VLI) rose 87 cents to $50.85 after the pipeline operator said first-quarter earnings jumped 98% to $35.3 million, or 75 cents a share thanks to an acquisition last summer. Valero purchased Kaneb Services and Kaneb Pipe Line Partners in July 2005 for $2.7 billion, making it the country's largest petroleum storage operator.

Revenue climbed from $56.6 million to $274 million, beating analysts' expectations of $275.9 million in earnings, according to Thomson First Call. Valero LP is a subsidiary of Valero Energy, the country's largest independent refiner.

This week, a parade of energy companies will be reporting first quarter earnings, including ConocoPhillips, Exxon Mobil,

Valero Energy

(VLO) - Get Report

,

BP

(BP) - Get Report

,

Chevron

(CVX) - Get Report

,

Anadarko

(APC) - Get Report

and

Apache Energy

(APA) - Get Report

. High energy prices and the resumption of production in the Gulf of Mexico, where hurricanes shut down much of the region's oil industry, are expected to boost profits.