Oil prices fell below $73 a barrel on Tuesday in thin trade, but nagging fears about supply disruption and expectations of strong US demand for gasoline prevented a deeper sell-off. London Brent crude was 80 cents lower at $72.59 a barrel by 1715 GMT after breaking through the $73-a-barrel psychological level.
Trading activity has been limited so far this week because of the closure of the US market to mark Independence Day. Ahead of the holiday, prices rallied more than $3 a barrel for US crude last week on expectations of record demand from US motorists over the long holiday weekend, despite near record pump prices.
The next snap-shot on the state of US fuel inventories will be released on Thursday, a day later than usual because of the Independence Day holiday. US unleaded gasoline prices average at $2.932 a gallon, according to the American Automobile Association, just below the record of $3.056.
The peak was struck in September last year after massive hurricane damage and forecasters have predicted another active US hurricane season. "The bull run is back and the hurricane season lies ahead," said Deborah White of SG CIB in a research note.
The investment bank has predicted this season could see hurricane-related losses of 33 million barrels of oil, as well as 25 million barrels of oil equivalent of natural gas and 20 million barrels in light products, such as gasoline. "The 'triple whammy' would certainly send crude heading through the $80 a barrel mark," SG CIB said.
US crude has already rallied by around 20 percent from the end of last year, pushed higher by anxiety about oil producer Iran's dispute with the West over its nuclear programme, as well as disruption of oil output by militant unrest in Nigeria.
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