Light, sweet crude for April delivery rose 30 cents to $60.37 a barrel in morning trading on the New York Mercantile Exchange.

Crude inventories rose by 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But gasoline inventories fell by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, fell by 5.0 million barrels to 128.3 million barrels. Most of the drop in distillates was due to diminishing heating oil supplies.

Analysts were expecting, on average, a modest rise in crude oil and gasoline inventories and a smaller drop in distillates.

Heating oil futures rose more than 2 cents to $1.7030 a gallon; gasoline futures rose 3 cents to $1.7350 a gallon; and natural gas prices dropped 6 cents to $7.65 per 1,000 cubic feet.

The EIA also reported Thursday that natural gas in storage fell by 223 billion cubic feet to 1.865 trillion cubic feet, around what the market was expecting.

Meanwhile Thursday, the International Atomic Energy Agency, the U.N. nuclear watchdog, was expected to report that Iran -- OPEC's No. 2 exporter -- is still enriching uranium, which could trigger harsher U.N. sanctions.

On Wednesday, Iran called for talks with the U.S. regarding its uranium enrichment activities, but showed no signs of halting its program.

Light sweet crude rose 2.1 percent on Wednesday to settle above $60 a barrel on the Nymex for the first time this year following increasing tensions over Iran's uranium enrichment program and shutdowns of a pipeline and an oil field.

However, the effects of the two shutdowns should be short-lived. TEPPCO Partners LP said its refined products pipeline, which had a leak in Indiana, should restart in two days, while BP PLC said its Northstar oil field should resume operations next week, according to Dow Jones Newswires.

In a report written by IAEA Director General Mohamed ElBaradei, the agency also said that the Islamic republic continues construction of a reactor that will use heavy water and a heavy water production plant - also in defiance of the Security Council.

Both enriched uranium and plutonium produced by heavy water reactors can produce the fissile material used in nuclear warheads. Iran denies such intentions, saying it needs the heavy water reactor to produce radioactive isotopes for medical and other peaceful purposes and enrichment to generate energy.

The six-page report obtained by The Associated Press also said that agency experts remain "unable ... to make further progress in its efforts to verify fully the past development of Iran's nuclear program" due to lack of Iranian cooperation. That, too, put it in violation of the Security Council, which on Dec. 23 told Teheran to "provide such access and cooperation as the agency requests to be able to verify ... all outstanding issues" within 60 days.

Justice Breyer expressed skepticism Wednesday about AT&T's argument, stating that it could pave the way for extensive patent infringement allegations whenever US patented products are copied overseas. Conversely, Justice Kennedy questioned the difference between the master discs supplied by Microsoft and the subsequently copied discs distributed to foreign manufacturers for installation on their computers, while Justice Alito noted that the ease of copying the discs abroad renders Microsoft's distinction "artificial." Chief Justice John Roberts, Jr. recused himself at the start of oral arguments; according to his financial disclosure form, Roberts owns between $100,001 and $250,000 worth of Microsoft stock.

US Attorney General Alberto Gonzales unveiled the First Freedom Project (FFP) Tuesday afternoon, a new Department of Justice initiative aimed at stricter enforcement of laws against religious discrimination and educating the public about their rights in this area. The DOJ will hold training seminars across the US in conjunction with the program, and the FFP website includes instructions on how to file a religious discrimination complaint with the DOJ. The program was prompted by a DOJ report, also released Tuesday, that describes how the DOJ's Civil Rights Division has "dramatically increased enforcement" of religious discrimination laws between 2001 and 2006.

Gonzales made the following remarks during a Wednesday meeting of the Executive Committee of the Southern Baptist Convention:

The Department of Justice has actively pursued cases involving religion not just in access to education and public facilities, but in equal access to housing, lending, and employment as well. Over the past six years, we have had many successes. We've launched scores of investigations involving religious discrimination in education and housing, a sharp and marked increase in the Justice Department's enforcement of these important federal protections. We have fought to maintain and make clear the crucial distinction between improper government speech endorsing religion and constitutionally protected private speech endorsing religion.

Why should it be permissible for an employee standing around the water cooler to declare that 'Tiger Woods is God,' but a firing offense for him to say 'Jesus is Lord'? These are the kinds of contradictions we are trying to address...

As part of our ongoing efforts to strengthen and preserve religious liberty in this country, I am unveiling today a new initiative: the First Freedom Project. Under this program, the Department will build on our extensive record of achievement in this area and commit to even greater enforcement of religious rights for all Americans.