WASHINGTON (AFX) - Oil prices fell by more than $1 a barrel Tuesday in trading influenced by profit-taking, brokers said.
Refinery snags in the U.S., production problems in Nigeria and continued fighting between Israel and Hezbollah helped keep prices around $74 a barrel.
Light sweet crude for September delivery declined by $1.30 to settle at $73.75 on the New York Mercantile Exchange, where gasoline futures slid by nearly 3 cents to settle at $2.2849.
September Brent at London's ICE Futures exchange fell $1.33 to $73.28 per barrel.
Man Financial oil broker Andrew Lebow said there was no obvious catalyst for the selling, though the market appears to have become more confident that the fighting between Israel and Hezbollah will not spread in the oil-rich region.
Or, Lebow said, it 'could just be some good old-fashioned profit-taking.'
Oil prices had briefly fallen Monday on traders' growing belief that the violence in Lebanon and Israel would be contained. But reports of refinery snags from Texas to California reignited concerns about fuel supplies during the busy summer driving season.
On Tuesday, Royal Dutch Shell PLC said it shut off 180,000 barrels of daily crude-oil production in Nigeria because of an unexplained pipeline leak. The shutdown of the pipeline in the eastern Niger Delta brings the company's total daily production losses in Nigeria to more than 650,000 barrels a day -- two-thirds of which is due to violence in the region.
The fighting that broke out between Israel and Hezbollah militants in Lebanon on July 12 lifted crude futures to a record $78.40 two days later on fears that the violence would escalate into a regional war and disrupt supplies, particularly from Iran, OPEC's No. 2 supplier and a backer of Hezbollah.
On Tuesday, Israeli troops sealed off a Hezbollah stronghold and warplanes killed six people in a market city in southern Lebanon on Tuesday, while Beirut was pounded by new airstrikes. Guerrillas fired rockets at northern Israel, killing a girl, as the two-week-old crisis showed no signs of letting up, despite frantic diplomatic efforts.
The violence has killed hundreds in Lebanon and dozens in Israel.
But the fighting hasn't spread -- a key reason why oil has declined from highs above $78, analysts said.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.