Shares of oil company ConocoPhillips (NYSE: COP) have lost a little over 2% in early morning trading, even as the company posted a growth of almost 17% for its first-quarter profit. The decline came as a reaction to lower crude oil prices that retreated below $115 a barrel on recovery in the U.S. dollar, dragging down energy stocks.

ConocoPhillips reported its quarterly profit rose to $4.14 billion, compared with $3.55 billion a year ago, boosted by record oil prices which recently jumped above $118 a barrel due to tight supplies and the weak dollar. The company posted earnings of $2.62 a share, topping analysts' predictions for $2.42, according to Thomson Financial. Its quarterly revenue also rose up to $54.9 billion from $41.3 billion a year ago.

The company's exploration and production business saw a gain of 24% to $2.89 billion, helped by increased commodity prices. The third-largest U.S. oil company also said that during the quarter it had to face declining volumes and higher taxes that put pressure on its refining operations earnings. "Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," ConocoPhillips' chairman and chief executive stated.

ConocoPhillips' shares have been gaining ground during 2007. However, the company has shown signs of weakness for the past few months as the oil sector has been under pressure on increased concerns over an economic slowdown possibly impacting oil demand.

Regardless crude oil prices are currently slipping, I don't believe they are likely to continue to head substantially lower, and I expect further gains for the oil producer.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.