Oil Prices Slip Below $70 a Barrel

Gasoline prices are displayed at a BP/Amoco station in St. Louis with the St. Louis Gateway Arch in the background, in this Aug. 28, 2006 file photo. It wasn't long ago when U.S. motorists gritted their teeth at the prospect of $2 a gallon. And while it might be a welcome relief right now, most analysts say getting back to that level anytime soon is unlikely and would entail a major slowdown in the economy, if not a downright recession. A more likely scenario, these analysts said, is that retail gasoline prices will slide to about $2.50 a gallon by winter _ and then head higher again early next year. Still, even a temporary reprieve from soaring energy prices will be a balm for consumers, especially as the economy continues to cool. (AP Photo/James A. Finley) (James A. Finley - AP)

SINGAPORE -- Oil prices recovered slightly in Asian trading Monday, but remained below $70 a barrel after falling to a 10-week low in the previous session.

Light, sweet crude for October delivery on the New York Mercantile Exchange rose 10 cents to $69.28 a barrel in electronic trading midmorning in Singapore. The contract fell $1.07 Friday to close at $69.19 a barrel _ its lowest settlement price since finishing at $68.94 on June 20.

Nymex floor trading was closed Monday for the Labor Day holiday.

The crude contract declined Friday as Iran's defiance of the U.N. request to stop its nuclear enrichment program didn't lead to immediate sanctions, analysts said.

Also easing energy prices was a mixed U.S. jobs report, which suggested fuel demand probably won't surge sharply, and a more-subdued forecast for this year's hurricane season.

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.

U.N. chief Kofi Annan said Sunday after meeting with Iranian President Mahmoud Ahmadinejad that Iran's leader wants negotiations on the country's nuclear program but will not halt uranium enrichment ahead of talks.

In other trading Monday, gasoline futures dropped 0.14 cent to $1.7330 a gallon while natural gas prices rose 2.8 cents to $5.905 per 1,000 cubic feet.

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.

Last year, hurricanes Katrina and Rita showed just how vulnerable oil and natural platforms and pipelines are to powerful storms, and how severe flooding along the Gulf Coast was capable of shutting down oil refineries and natural-gas processing plants. The region's fuel production declined for months, tightening supplies and sending prices higher.