Oil eased below $73 today as weekly figures showed US crude stockpiles fell in line with expectations, easing supply concerns over the partial shutdown of the country's largest oilfield last week.
US light, sweet crude for September delivery were down 65 cents to $72.40 a barrel by 1508 GMT, losing ground for the third straight session and reaching the lowest level since July 20.
ICE Brent crude was trading 61 cents lower at $73.19 a barrel.
US crude supplies fell 1.6 million barrels last week, the Energy Information Administration said, in line with analysts' expectations.
"Some people were whispering ahead of the release of the data that the Prudhoe Bay shutdown decision by BP might have affected supply in a large way," said Phil Flynn, an analyst with Alaron Trading. "Those speculators are very disappointed right now."
Domestic gasoline stocks dropped 2.3 million barrels, while distillate supplies rose 800,000 barrels.
Prices have slumped from above $77 a barrel a week ago after BP said it would shut down only half of its 400,000 barrel per day (bpd) Prudhoe Bay oilfield in Alaska and the United Nations brokered a truce to end a month-long war in the Middle East.
"Oil prices have come down now that the previously supportive factors of Israel-Hizbollah and Prudhoe Bay are out of the picture," said Naohiro Niimura, head of research and sales at Mizuho Corporate Bank.
The focus will turn later today to US oil data, with weekly inventory statistics expected to show a 1.8 million-barrel decline in gasoline stocks due to strong demand in the last weeks of the summer driving season, which ends with the Labour Day holiday weekend in early September.
Attacks against foreign oil workers in Nigeria and Iran's stand-off with the West over its nuclear development are also lending support to prices, which are still up nearly 20 per cent this year, aided by healthy investor buying.
US consumer price inflation data due at 1230 GMT may provide another trigger for an influx of funds.
"If the CPI data turns out to be weak and supports projections of no interest rate hike in the United States in September, new funds are likely to flow to oil because fundamentals are strong," said Niimura.
Oil demand has expanded swiftly as major world economies continue to grow despite record fuel costs, although data showing a slowing pace of investment in China last month was viewed as a signal that efforts to prevent the world's fourth-biggest economy from overheating were beginning to bite.