Oil fell below $72 on Thursday, deepening losses from the previous session, as worries over U.S. gasoline supplies eased slightly ahead of the summer driving season.
U.S. light crude futures fell 60 cents at $71.33 a barrel by 0900 GMT, after slipping 95 cents on Wednesday. Prices have fallen more than 5 percent from a record high of $75.35 struck late last week.
London's Brent crude shed 77 cents to $71.32.
U.S. gasoline stocks fell 1.9 million barrels last week, marking the eighth consecutive weekly decline, government data showed on Wednesday (). Analysts had expected a fall of 2.6 million barrels.
The drop in gasoline stocks was smaller than expected. And given that refiners are cranking up runs, the market could not hope for a significantly large gasoline draw in the future, said Keith Sano, the manager at the commodity business unit of Sumitomo Corp. in Tokyo.
U.S. refinery operation rates averaged 88.2 percent last week, improving by 2 percentage points, producing more fuels as plants emerged from regular maintenance shutdowns in the first quarter, the government figures showed.
June gasoline had risen a modest 0.2 percent on Wednesday, bucking the trend, but led losses on Thursday to stand 1.30 cents, or 0.6 percent, lower at $2.1205 a gallon.
Industry experts expect oil prices to remain expensive due to ongoing geopolitical tensions in Iran, Nigeria, Iraq and other key oil-producing countries.
In the next one or two years, unless there is a very big surprise, we don't expect oil prices to fall from current levels, said International Energy Agency Chief Economist Fatih Birol in a speech on Wednesday in Istanbul.
Traders were edgy ahead of Friday's report by the International Atomic Energy Agency (IAEA) chief Mohamed ElBaradei to the U.N. Security Council on Iran's compliance with a demand to halt uranium enrichment.
Worries over supplies from Nigeria also persisted after Exxon Mobil Corp boosted security at its 420,000 barrel-per-day (bpd) Qua Iboe oil export terminal in Nigeria on Tuesday.
(Additional reporting by Ikuko Kao in Tokyo)