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)

"The situation will likely drag on with no significant development on either side, but will continue to provide a high floor for oil prices," said Victor Shum, energy analyst with Purvin & Gertz in Singapore.

Analysts have said concerns about Iran have added at least $10 a barrel to oil futures.

Supply concerns also were tempered after BP PLC hinted that production at Prudhoe Bay could be restored to normal levels earlier than expected.

Additionally, hurricane forecaster William Gray's team on Friday downgraded for the second time its expectations for the 2006 Atlantic storm season. The team, based at Colorado State University, called for a slightly below-average year, with only five hurricanes instead of the seven previously forecast.

In other Nymex prices, gasoline futures fell 4.87 cents to settle at $1.7344 a gallon, while heating oil fell 4.37 cents to settle at $1.9674 a gallon. Natural gas futures dropped 17.1 cents to settle at $5.877 per 1,000 cubic feet.

U.S. markets will be closed Monday for Labor Day.

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Associated Press Writer George Jahn in Vienna, Austria, contributed to this report.