Oil prices were steady this morning as traders awaited the weekly report on US petroleum inventories and the market seemed more confident that the Israeli-Hezbollah conflict would not spread in the oil-rich region.
Light sweet crude for September delivery was unchanged at $73.75 in electronic trading on the New York Mercantile Exchange.
Last week's report from the US Department of Energy showed an unexpected increase in US gasoline supplies, causing oil prices to fall.
In other Nymex trading, heating oil rose marginally to $1.9444 a gallon and gasoline futures fell 0.65 cent to $2.2784 a gallon. Natural gas futures rose 3.8 cents to $6.447 per 1,000 cubic feet.
Oil prices hit a record $78.40 high on July 14, two days after fighting broke out between Israel and Hezbollah militants in Lebanon, raising fears that the violence would escalate into a regional war and disrupt supplies, particularly from Iran, OPEC's second largest supplier and a backer of Hizbollah. The violence has killed hundreds in Lebanon and dozens in Israel.
But the fighting has not spread - a key reason why oil has declined from highs above $78, analysts said.
This week, refinery snags in the United States and Venezuela and production problems in Nigeria also helped keep prices around $74 a barrel.