High U.S. Oil Supplies Push Crude Under $60

Crude oil prices slipped below $60 a barrel Friday as traders took profits ahead of the weekend, but worries about violence in Nigeria and the possibility of U.N. sanctions against Iran still underpinned the market.

Light, sweet crude for April delivery fell 51 cents to settle at $59.96 a barrel on the New York Mercantile Exchange — its lowest settlement price since Feb. 17, when the contract settled at $59.88. Crude futures have fallen nearly 6 percent this week from last Friday's settlement price of $63.67.

Gasoline fell 3.2 cents to settle at $1.6881 a gallon on Friday, a day after gaining almost 7 cents. Heating oil fell 3.54 cents to settle at $1.6846 a gallon, while natural gas rose 4.5 cents to settle at $6.646 per 1,000 cubic feet.

"We're seeing a lot of profit-taking in products — heating oil and gasoline — ahead of the weekend," said Alaron Corp. analyst Phil Flynn.

Gasoline futures had rallied Thursday on expectations that inventories would be drawn down as refineries in the United States reduce output while undergoing spring maintenance.

The U.S. Energy Information Administration reported Wednesday that commercial gasoline stocks fell 1.1 million barrels to 224.8 million barrels last week as refiners lowered utilization by 2.2 percentage points to a relatively low 83 percent of operating capacity.

Gasoline futures have seen especially big swings this season, as many states are banning the gasoline additive MTBE, a ground pollutant, and gasoline contracts will eventually have to phase it out.

"This is going to be the most confusing rollover in the history of the gas market," Flynn said.

Still, oil markets are on edge over militant attacks on oil facilities from the Middle East to Nigeria and the confrontation over Iran's nuclear program.

"I believe the market is a lot closer to a bottom than to a top," Flynn said. "I doubt you'll see the market fall too far."

Kuwaiti oil minister Sheik Ahmed Fahd Al Ahmed Al Sabah has said he believes political turmoil and extremism have added $5 to $8 to the price of a barrel of oil.

European Union foreign ministers took stock Friday of international efforts to get Iran to resolve concerns over its nuclear program, an issue that is raising the prospect of U.N. sanctions against Tehran.

Iran, the No. 2 producer within the Organization of Petroleum Exporting Countries, says its program is aimed at generating energy, while the United States contends that Tehran is working toward a nuclear weapon.

In Nigeria, a militant group holding three foreign oil workers hostage said its fighters clashed with army troops this week in the country's oil-rich Delta.

The militants said in an e-mail statement that one of their vessels was attacked Wednesday on the Escravos River by four Nigerian navy patrol boats, sparking a 45-minute gun battle they claimed left seven government soldiers dead.

Recent attacks by militants on Nigerian pipelines and oil facilities have left the country's production still down by about 400,000 barrels a day. Analysts said the renewed violence dampened hopes that Nigerian production can soon return to normal.