Update from 3:21 p.m. EDT

Energy futures were mostly weaker Tuesday, and the nearest-month oil contract fell below $64 a barrel after U.S. Energy Secretary Samuel Bodman suggested the government would be willing to release more heating oil supply to the market.

Light, sweet crude for November delivery dropped $1.57 to $63.90 a barrel in Nymex trading after hitting an intraday low of $63. Heating oil futures lost 3 cents to $2.05 a gallon.

Mike Armbruster, energy analyst Altavest Worldwide Trading, said the drop in prices wasn't surprising given the volatility of the market in the last few days.

"I'm still waiting for a $5-move to happen one of these days," he said. "If it's going to happen, it could happen soon."

The Associated Press reported that in response to a question Monday about the Northeast heating oil supply, Bodman said the U.S. was "prepared to do what is necessary with strategic reserves." Bodman later made similar comments in a televised interview on CNBC.

"I wouldn't be trading on that," Armbruster said of Bodman's comments. "How many times have we seen a rally after news of a release of the strategic petroleum reserve ? They're doing their best to jawbone the market lower."

Natural gas futures rebounded from an earlier selloff to rise 21 cents to $14.23 per mmBtu, and unleaded gasoline was down 6 cents at $2 a gallon.

Meanwhile, BP ( BP) said in a statement on its Web site the hurricanes that recently hit the Gulf Coast, Katrina and Rita, will cut its third-quarter replacement-cost profit before interest and taxes by more than $700 million. The oil giant said its trading conditions were "significantly impacted" by the storms, including reduced refinery output at its Texas City, Texas, refinery.

Exxon Mobil ( XOM) said Monday afternoon that one of its units was the high bidder on the large Cyrenaica Basin Contract Area 44 in the latest Libyan license round.

Contract Area 44, with 2.5 million acres, is located offshore Libya in water ranging from about 10 feet to more than 10,000 feet deep. Exxon Mobil was the only U.S. oil company named as a high bidder in the license round.

Elsewhere, J.P. Morgan cut Newfield Exploration ( NFX) to neutral from overweight, citing concerns relating to Gulf of Mexico outages. Shares of Newfield Exploration were down $2.27 recently to $47.58.

Western Gas Resources ( WGR) said in a statement that its production and drilling are on track to meet or slightly exceed the Denver company's earlier stated goals for the year.

El Paso ( EP) proposed building more than 1,000 miles of pipeline that would connect the company's western lines with its southern and eastern lines.

Doug Foshee, El Paso's president and chief executive officer, said in a statement the recent hurricanes show the U.S. "needs access not only to new sources of natural gas supply, but diversity in those supply sources." El Paso said it would hold a one-month open season to get input from potential shippers. The Houston-based company owns the largest natural gas pipeline system in America.

Teppco Partners ( TPP) said it increased the throughput rates on its mainline refined products system, which had been operating at reduced rates as a result of Hurricane Rita.

The company said its 14-inch and 16-inch diameter pipelines are pumping around 75% of normal operating capacity, while its 20-inch diameter mainline system is pumping around 60% of the usual capacity.

Additionally, Apache ( APA) said about half of its gross operated natural gas production and one-third of its gross operated oil production in the Gulf of Mexico are back online following hurricanes Katrina and Rita.