Oil Prices Slip Below $70 a Barrel

In this July 23, 2006, file photo, a long line of 2006 Nissan Armada all-wheel-drive vehicles sit in a row on the back lot of a Nissan dealership in the south Denver suburb of Englewood, Colo. (AP Photo/David Zalubowski) (David Zalubowski - AP)

NEW YORK -- Oil prices fell below $70 a barrel on Friday, hitting a 10-week low, as Iran's defiance of the U.N. request to stop its nuclear enrichment program didn't lead to immediate sanctions.

Also easing energy prices ahead of the long Labor Day weekend was a mixed U.S. jobs report, which suggested fuel demand probably won't surge sharply. Prices also responded to a more-subdued forecast for this year's hurricane season and plans from BP PLC to increase output at its huge oil field at Prudhoe Bay.

Light, sweet crude for October delivery fell $1.07 to settle at $69.19 a barrel on the New York Mercantile Exchange _ its lowest settlement price since finishing at $68.94 on June 20.

Brent crude on London's ICE futures exchange fell $1.10 to settle at $69.15 a barrel.

Crude futures have fallen 4.6 percent this week, and are down more than 11 percent from their record high of $78.40 a barrel reached on July 14.

Average U.S. pump prices have pulled back over the past month from more than $3 for a gallon of unleaded regular gasoline to $2.79 a gallon, according to AAA.

Iran, OPEC's second-largest producer behind Saudi Arabia, defied the U.N. Security Council's Thursday deadline to halt its nuclear program. Traders have been worried that Iran might block oil exports if punished by the United Nations. But at this point, American officials and others say no action will be sought before a key European diplomat meets with Tehran's atomic energy chief next week to seek a compromise.

"Anything that's going to happen with Iran isn't going to happen tomorrow ... any kind of line in the sand is quite a ways off," said Fimat USA analyst Mike Fitzpatrick.

Traders will continue to monitor the situation, though, and prices aren't likely to fall much further given the possibility of blocked exports, he added.

Iran's president, Mahmoud Ahmadinejad, lashed out at the United States on Thursday, calling it "tyrannical" and insisting Tehran would not be "bullied" into giving up the right to use nuclear technology.

President Bush called for "consequences to Iran's defiance," saying the "world now faces a grave threat from the radical regime in Iran."

But most market participants do not expect any major sanctions to be imposed against the country because Russia and China were likely to oppose such a move.