Oil steadied above $71 a barrel today after rising to a 10-month high on worries about low US fuel supplies at a time of peak gasoline demand in the world's top consumer.
London Brent crude for August, seen as more representative of global prices, eased 25 cents to $71.22 a barrel earlier this morning. US crude for July slipped 12 cents at $67.88.
Brent hit a 10-month high of $71.88 on Friday after the latest report on US fuel stocks showed stockpiles unexpectedly failed to rise and refinery use declined.
Gunmen in Nigeria overran an oilfield station operated by Italy's Eni yesterday, renewing concern about supplies from Africa's top exporter. A general strike is due to start in Nigeria on Wednesday.
Dealers also weighed the potential of violence in Israel widening to draw in neighbouring Middle East states, which pump a quarter of the world's oil. Israel said today it cut fuel supplies to the Gaza Strip, as it hopes to isolate Gaza after Hamas seized control of the territory.
US crude hit a record $78.40 nearly a year ago on fears that fighting between Israel and Lebanese Hizbullah guerrillas could spread to Middle East oil producers.
Iran's chief nuclear negotiator and the European Union's foreign policy chief may meet again in the next few days for talks on Iran's atomic programme -
a dispute that has underpinned prices this year.