Oil Prices Steady Above $ 73 in US

London oil futures have held firm $ 73 a barrel in muted activity today as traders awaited the end of the long U.S. holiday weekend, expected to have lifted gasoline demand as holiday makers took to the road.

London Brent crude was up 8 cents at $ 73.47 a barrel by 0652 GMT, reversing part of Monday's 12-cent loss.

The U.S New York Mercantile Exchange (NYMEX) will resume trading on Wednesday after the U.S. Independence Day holiday, when holiday drivers are expected to reach a record number.

"The market lacks direction today because the U.S. market is closed. But the tone is bullish, with Brent holding a tight grip above $ 73," said Hiroyuki Kitakata, the director at Barclays Capital in Tokyo. "Traders are looking forward to figures showing U.S. holiday gasoline demand."

High pump prices show few signs of deterring U.S. motorists from hitting the highway this summer as the U.S. economy grew in the first quarter at the fastest rate in 2-½ years.

U.S. weekly inventory data which is due on Thursday, a day later than usual due to the holiday, will give a snapshot of supply and demand at the end of last week.

Thinning fuel stocks could add impetus to a market that has rallied more than 20 percent this year, lifted by prolonged international tension over key oil exporter Iran's nuclear program and partial loss of Nigeria's crude supply.

Senior Iranian nuclear officials on Monday dismissed a demand that Iran suspend uranium enrichment, Iranian news agencies reported.

The suspension was proposed in the package backed by six world powers, to which Iran had said it would respond by August 22.
Western calls for Iran to suspend its uranium enrichment program aren't ``reasonable,'' Agence France-Presse reported, citing Iran's chief nuclear negotiator, Ali Larijani.

“I would be surprised if anybody is expecting a resolution'' by that date, said Gerard Burg, minerals and energy economist with National Australia Bank Ltd. in Melbourne. “That, combined with the peak demand in the U.S.,'' may be enough to send prices higher.

The average U.S. pump price for regular-grade gasoline rose 6.5 cents in the past week to a seven-week high of $ 2.934 a gallon as motorists filled their tanks for the holiday, a U.S. Energy Department report showed yesterday.

“Oil in New York seems ready to hit a new all-time high after the Independence Day holiday weekend,'' said Ken Hasegawa, a manager of the international division at oil broker Himawari CX Inc. in Tokyo. “Strong U.S. gasoline demand, coupled with the steady stock market there, may lure hedge funds to return to the oil market again.''