Energy Sector Roundup: Crude Holds Steady

Following is a summary of top stories in the energy sector Wednesday afternoon.

Oil Contracts Virtually Unchanged

Oil prices finished about where they began, after jumping more than $2 earlier on reports of lower U.S. oil stockpiles and an Iranian missile test.

Light, sweet crude for August delivery rose a penny to settle at $136.05 a barrel on the New York Mercantile Exchange, but prices shifted between positive and negative territory as traders parsed details of the weekly inventories report following its midmorning release.

Retail gasoline prices in the U.S. hovered at a record high just shy of $4.11 a gallon for the third straight day, according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel prices at the pump rose by more than half a penny to a new high of $4.813 a gallon.

In other Nymex trade, heating oil futures fell 3.14 cents to $3.8516 a gallon, while gasoline futures lost 1.77 cents to settle at $3.3808 a gallon. Natural gas futures dropped 36.2 cents to settle at $12.006 per 1,000 cubic feet.

August Brent crude rose 15 cents to settle at $136.58 a barrel on the ICE Futures exchange in London.

Crude Supplies Down More Than Expected

For the week ended July 4, crude oil inventories fell by 5.9 million barrels, or 2 percent, to 293.9 million barrels. That is 16.8 percent below year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts expected a drop of 1.9 million barrels, according to a survey by Platts, the energy research arm of McGraw-Hill Cos.

Gasoline inventories rose by 900,000 barrels to 211.8 million barrels, 3.4 percent above year-ago levels. Analysts expected stockpiles to rise by 500,000 barrels.

Inventories of distillate fuel, which include diesel and heating oil, rose by 1.8 million barrels to 122.5 million barrels for the week ended July 4. Analysts expected distillate stocks to rise by 2.2 million barrels.

Pelosi Asks Bush to Release Strategic Reserves

House Speaker Nancy Pelosi called on President Bush to release oil from the government's emergency reserve to knock down gasoline prices she says "are helping push the economy toward recession."

Pelosi, D-Calif., in a letter to Bush noted that the Strategic Petroleum Reserve has been used three times before and each time the action stabilized oil markets and lowered gas prices.

Action is needed "to assist consumers and strengthen the economy," Pelosi said.

The threats to the economy and national security from high oil prices "are the kind of circumstances ... in which utilization of the Strategic Petroleum Reserve is more than justified," Pelosi wrote in the letter sent late Tuesday.

Bush repeatedly has rejected calls to use oil from the government reserve, which is 97 percent full and currently holds about 702 million barrels of oil _ enough to replace imports for two months. It's stored in salt caverns along the Louisiana and Texas coast.

Marathon Selling Some Norway Interests

Marathon Oil Corp. will sell some of its interests in acreage off Norway's coast to the U.K.'s Centrica PLC for $416 million.

As of year-end 2007, the assets being sold contained net proved reserves of 4.8 million barrels of oil equivalent and net production of about 7,000 barrels of oil equivalent per day.

Russian Oil Official 'Not Worried' About Production

A top government official shrugged off concerns about Russia's stagnating oil output, saying several new fields are expected to come on stream by the end of the year.

Deputy Prime Minister Igor Sechin _ chairman of state-owned oil major Rosneft _ told a briefing that he was "not worried" about the decline in Russia's oil output in the first half of this year, adding that industry tax cuts would help shore up production.

Russian oil production fell this year for the first time in years, as oil companies struggled under the burden of crippling oil taxes, which they claimed prevented them from investing in new exploration to offset declining output in mature fields in West Siberia.

In the first quarter of this year, crude production fell 0.3 percent compared to the same quarter the previous year, said Sechin.

Conservation Groups Sue Govt. on Polar Bear Harm

Two conservation groups filed a lawsuit challenging the Bush administration's decision to let oil companies unintentionally harass or harm polar bears and walruses off the northwestern Alaska coast.

The lawsuit filed in U.S. District Court in Anchorage claims that federal officials violated laws designed to protect the animals and their sensitive habitat in the Arctic waters of the Chukchi Sea.

Last month, the U.S. Fish and Wildlife Service decided to grant legal protection to seven oil companies in the Chukchi Sea over the next five years should they accidentally harm "small numbers" of polar bears or Pacific walruses while drilling or during other exploratory activities. The agency is named as a defendant in the suit, along with Interior Secretary Dirk Kempthorne.

Fish and Wildlife Service officials said oil and gas exploration will have a negligible effect on the bear and walrus populations. Global warming is most likely to cause the animals' numbers to dwindle, the agency said.

--Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to gstec@ap.org.