Oil prices eased below $73 a barrel yesterday as supply fears eased in the US following the partial shutdown of BP's Prudhoe Bay field.
US light sweet crude for September delivery fell 60 cents to $72.45 a barrel - the lowest since July 20.
In London, Brent crude was trading 77 cents lower at $73 a barrel.
Market sentiment was boosted by US Energy Department data that the fall in the country's oil inventory for the week beginning August 11 was lower than expected at 1.6 million barrels and stocks, running at 331 million barrels, were well above average.
Opec, the Organisation of Petroleum-Exporting Countries, yesterday said world demand was flattening, partly because of record prices.
Demand will rise by 1.3 million barrels per day, 80,000 bpd less than expected in July, the 11-member group said in a monthly report.
Opec left estimated growth in 2007 unchanged at 1.3 million bpd.
Demand in industrialised OECD countries fell in the second quarter and last week's alleged aircraft bomb plot may curb air travel, the organisation said.
"The planned attack on airliners in London is expected to dent jet fuel demand, at least in the short run," the report said. "High prices have somewhat dampened demand growth, especially in Asian countries."
Oil is up 20 per cent in New York this year due to attacks on Nigeria's oil industry, concern about the row over Iran's nuclear programme and worries the Lebanon conflict could spread.
The report from Opec, source of a third of the world's oil, points to an easing of the strain on supply in the 84.5 million bpd world market, analysts said.
"Fundamentals are beginning to deteriorate from the point of view of prices," said Adam Sieminski, chief energy economist at Deutsche Bank. "The prices are beginning to encourage downward demand."