Energy futures fell Friday, as traders expecting a weakening of demand in the coming months cashed in profits from the previous session's rally.
An encouraging employment report suggested the economy is weathering the problems affecting the subprime mortgage industry.
But many energy traders and analysts question whether demand for oil and petroleum products will be strong enough in the fourth quarter to support $80 per barrel oil.
Others argue that demand for oil will increase as home heating season progresses. While crude inventories have risen for two straight weeks, supplies of distillates including heating oil fell last week.
Investors betting demand will tighten in the fourth quarter drove oil prices $1.50 higher on Thursday.
On Friday, U.S. light, sweet crude for November delivery fell 22 cents to close at $81.22 per barrel on the New York Mercantile Exchange.
"There's profit-taking going on after yesterday's rally," said Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Conn.
The quick resolution of many of Thursday's West Coast refinery outages also pressured prices.
November gasoline fell 2.41 cents to $2.0281 per gallon on the Nymex, while heating oil futures fell 2.22 cents to $2.2091 per gallon. Both contracts surged more than 5 cents on Thursday, after a report showed inventories fell last week, and after news of a number of minor refinery problems.
Natural gas for November delivery fell 27.6 cents to $7.136 per 1,000 cubic feet. Forecasters see little chance that a series of storms strung from the Gulf of Mexico to the central Atlantic will develop into tropical storms that could threaten critical gas and oil infrastructure.
London November Brent crude fell 63 cents to $78.34 a barrel on the ICE Futures exchange.
Oil prices have been volatile in recent days as investors have battled over whether demand will grow or weaken in the fourth quarter.
Energy Department data suggests demand for gasoline is falling, and many analysts think that's a function of this year's record gas prices.
At the pump, gas prices slipped 0.8 cent overnight to a national average of $2.771 per gallon, according to AAA and the Oil Price Information Service. Prices are well off their May peak of $3.227 a gallon, but remain 48.1 cents higher than they were a year ago.
"With gasoline prices still clinging to the $3 [per] gallon area in many regions, further slowing in gasoline demand should be expected," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill., in a research note.
But others argue that falling refinery activity and heating oil inventories suggest supplies of heating and crude oil will be tight when heating season demand begins to grow. Many refineries shut down to conduct seasonal maintenance in the fall.
"With heating oil stocks 23 percent below normal for this time of year and refinery capacity below normal for this time of year, where is the capacity that's going to make heating oil going to come from?" Armstrong said. "The picture's tight, and it's going to get tighter before it gets better."