Slight Pullback for Crude - TheStreet

Slight Pullback for Crude

Oil falls 22 cents to close at $63.63 a barrel.
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Energy futures slid Friday as traders rotated out of the May oil contract ahead of its upcoming expiration and prepared for a weekend fraught with uncertainty.

Near-month light sweet crude fell 22 cents to close at $63.63 a barrel on the New York Mercantile Exchange. Reformulated gasoline slipped 2 cents to $2.17 a gallon, and heating oil dropped a penny to $1.90 a gallon.

The current contract for natural gas fell 12 cents to $7.85 per million British thermal units.

Escalating violence in the Middle East kept energy futures supported through most of the session. Thursday's suicide bombing of the parliament building in Bagdad's occupied Green Zone was a chilly reminder that America's grasp on Iraq is precarious at best.

The fact that bombers were able to penetrate the Green Zone suggests that nothing in Iraq is safe, including its vast oil fields.

Crude oil also garnered strength from a report issued by the International Energy Agency, according to Dennis Gartman, publisher of The Gartman Letter. The report says that OPEC member countries are doing a better job of collectively adhering to production quotas, thus keeping supplies tight.

Elsewhere, Venezuelan President Hugo Chavez said that federal soldiers will accompany government officials when they assume control of privately controlled oil installations on May 1. Various oil projects currently under the control of private foreign entities like

Chevron

(CVX) - Get Report

and

Exxon Mobil

(XOM) - Get Report

are being nationalized.

Venezuela has invited the current project operators to remain partners in the projects, but the terms of the changeover have not yet been agreed upon. Exxon has threatened to abandon its projects entirely, drawing reactionary threats from Chavez.

Energy stocks were mixed. The CBOE Oil Index advanced 0.4% to 682.46.

ConocoPhillips

(COP) - Get Report

finished the day fractionally higher at $70.54. Chevron closed slightly lower at $77.01, and Exxon was unchanged at $77.39

Meanwhile, a Russian business daily is reporting that Russian steel firm

Evraz

has made on offer to buy Canadian steel conglomerate

Ipsco

(IPS)

. The deal would be the second in two weeks in which companies that make tubular steel used in constructing oil and gas rigs was acquired.

Ipsco traded 1.7% higher at $148.50.

With commodity prices high and global demand for energy soaring, E&P firms have complained that there aren't enough drilling rigs to drill new wells and feed the world's voracious energy demands. Increased M&A activity in the sector is a sure sign that the global lack of drilling rigs is registering on investor's radar.