Oil dipped back to $70 on Friday, after surging to an eight-month high the previous session on fears new problems at U.S. refineries will constrict gasoline supplies already at unusually low pre-summer levels.
London Brent crude slipped 37 cents to $69.90 a barrel by 1017 GMT, eroding some of the previous day's gains of more than $2 or 3.3 percent, the biggest one-day rise since a 5 percent surge in late January. U.S. crude was up two cents at $64.88 having rallied 3.7 percent on Thursday.
News of a glitch at Murphy Oil's refinery in Meraux, Louisiana, coupled with maintenance at several major plants in Texas, has exacerbated fears that gasoline supplies may grow tighter as the peak-usage driving season draws near.
"Gasoline demand is still very strong despite higher prices," said ANZ Bank analyst Andrew Harrington. "There are expectations for a strong driving season."
U.S. pump prices recently rose above $3 a gallon -- cheap by world standards but expensive in the view of American drivers.
Travel and automobile group AAA said on Thursday it expects a 1.7 percent rise in the number of Americans who are likely to travel 50 miles or more over the Memorial Day holiday that marks the start of the summer vacation season.
U.S. gasoline futures led the energy complex's gains on Thursday, surging 4.3 percent to push its premium over crude up more than $1.50 to nearly $37 a barrel, near the intra-day $40 record high that followed Hurricane Katrina in 2005.
(Reuters, 18/05/2007)