Oil prices held just under $73 a barrel today, hovering near their highest in 10 months on expectations of strong summer gasoline demand and low inventory levels in the world's top consumer.
London Brent crude currently seen as more representative of global oil prices, fell 3 cents to $72.90 a barrel by 7.17am, although trading activity was expected to be muted due to the US public holiday.
US crude shed 8 cents to $71.33 after gaining 5 per cent over the past five days. The New York Mercantile Exchange (NYMEX) trading floor will be shut today, but electronic Globex trade continues as usual.
Although gasoline inventories in the United States have been rising steadily in recent weeks, they remain well below seasonal norms following a heavy maintenance season this spring and a slew of unplanned shutdowns. But demand is stronger than ever.
"Despite where prices are at the moment, there is no indication that demand is tapering off at the pump," said Andrew Harrington, commodities analyst from ANZ Bank in Australia.
US travel group AAA predicted last week that a record 41.4 million Americans would hit the roads for Fourth of July travel, up 0.8 per cent from last year despite near-record high pump prices.
"It's a lifestyle change that isn't going to change anytime soon - they love their big cars, and would sooner give up something else than that," Harrington said.
US weekly gasoline stocks probably rose by just 300,000 barrels last week, even with refinery utilisation rates recovering to above 90 per cent, a Reuters poll found.