Oil held steady this morning near the previous day's 11-month high, buoyed by fund flows and new Iranian tensions as traders waited to see whether US oil stock data would help extend a two-week rally.
London Brent crude currently seen as a better indicator of the global market, was down 2 cents at $76.38 a barrel by 7.38am, after rising 62 cents yesterday. It stood within sight of the record high of $78.65 from last August.
US crude was down 17 cents at $72.64 a barrel after it rose 62 cents in the previous session.
Energy analysts said speculative and institutional money pouring into crude oil futures was a major factor behind Brent's more than $6 rise since late July, though geopolitical jitters helped give prices another leg up yesterday.
"The tension between Iran and the United States comes when the market is still concerned over Nigerian oil production, and that's why investors are buying," said Sano Keiichi of Sumitomo Corp.
An Iranian newspaper quoted a senior adviser to Supreme Leader Ayatollah Ali Khamenei as saying Iran was producing centrifuges for refining uranium domestically, limiting the impact of United Nations sanctions.
The United States, which believes Iran is trying to build a nuclear bomb, was sending a fresh aircraft carrier to the US Navy's Fifth Fleet area of operations, which includes the Gulf, to replace one of two carriers already in the region.
Royal Dutch Shell resumed production of around 77,000 barrels per day in Nigeria after repairing a pipeline leak, but worries over production in the world's eight-biggest exporter persisted as the government struggled to end militant attacks.
Despite the supply worries, the Organization of the Petroleum Exporting Countries is showing no signs of easing output restraint. Top exporter Saudi Arabia will keep its crude supplies to Asian refiners steady in August, industry sources said.