Oil prices held around $72 on Tuesday, with U.S. refinery shutdowns reviving supply concerns just as peak summer driving demand draws to a close.
U.S. crude gained 18 cents to $72.14 a barrel by 7:26 a.m. EDT, rising for the fourth trading session. London Brent rose 3 cents to $70.98 a barrel.
The market is quickly refocusing on gasoline demand and inventories, Sumitomo Corp. said in a commodities research report.
It warned of a lingering impact from recent financial market turmoil, after the problems in the U.S. subprime mortgage sector and signs of slowing U.S. housing markets, saying a possible slowdown in the economy may erode oil demand in the long term.
OPEC Secretary-General Abdullah al-Badri said on Tuesday the subprime fallout had clouded the oil demand picture.
The situation in the past couple of weeks has become a lot more serious, Badri told Reuters in an interview.
Badri said on Monday that he felt the international oil market was well supplied, suggesting OPEC would keep supplies at their current levels when the group next meets on September 11.
Oil prices have fallen 8.5 percent since reaching a record peak of $78.77 on August 1 as speculators liquidated positions and some traders worried about the wider economic implications of a credit market squeeze.
But oil prices were supported by U.S. refinery snags and expected drops in gasoline stocks. Traders said Citgo cut rates at its 156,000-barrel-per-day refinery in Corpus Christi, Texas, after a problem with the alkylation unit.
That followed the outage of a curde unit at Chevron Corp.'s plant at Pascagoula, one of the 10 biggest in the United States, following a fire.
U.S. oil inventory data, to be released on Wednesday, may show a 1.3 million barrel draw in gasoline stocks and a 600,000 barrel draw in crude in the week to August 24, according to a Reuters poll of analysts.
(Additional reporting by Luke Pachymuthu)