Oil slipped below $75 on Wednesday but remained within sight of an all-time high ahead of U.S. data expected to show a further tightening of crude stocks in the world's top consumer.
U.S. crude fell 27 cents to $74.81 a barrel by 1334 GMT, off highs of $75.38, while London Brent crude fell 5 cents to $73.87.
Crude inventories in the world's top consumer were expected to decline by 400,000 barrels after bad weather interfered with imports. Gasoline stocks were seen down by 1.5 million barrels, a Reuters poll showed prior to Thursday's release of weekly U.S. data.
An elevated number of refinery outages have continued to plague the market and with demand staying solid, inventories have fallen to critically low levels, said a Barclays Capital report.
We expect gasoline prices to remain firm in the coming weeks, with some upside risk if inventory levels continue to move lower.
Some analysts expect oil supplies to strain to match demand later this year unless the Organization of the Petroleum Exporting Countries decides to ramp up production.
Comments from OPEC members suggest the group is likely to stick with existing output levels when it gathers on September 11. Only Indonesia, OPEC's second-smallest producer, has said it may propose an increase.
The general view in OPEC, which sets supply limits for 10 of its 12 members, is that an output boost would only add to already comfortable stock levels, an OPEC source said on Tuesday.
But the group may need to raise production by up to 1 million barrels per day (bpd) later this year, perhaps in December, should demand prove robust and inventories fall, the source added.
Prices have climbed 1.6 percent this week, towards a record high of $78.77 hit on August 1, as Hurricane Felix threatened the Gulf of Mexico. But Felix weakened to a tropical storm after hitting the Caribbean coastline of Nicaragua and Honduras.
It looked unlikely to emerge over the southern Gulf of Mexico, the home of Mexico's major oilfields.
So far this year, the U.S. and Mexican oil sectors have escaped major storm damage, but Colorado State University forecast the rest of the 2007 Atlantic hurricane season to be busy.