Oil retreated on Tuesday after hitting a 10-month high the previous session, but analysts predicted increasing crude oil demand from U.S. refiners and technical factors would soon push prices higher.
A weak dollar, which fell to a 26-year low versus the pound, has also boosted some commodities, notably copper and gold.
U.S. light sweet crude for August delivery (delayed) was down.
London Brent crude (delayed) was down, after reaching $72.77 on Monday, the highest since August 25.
"All of the ducks are lining up in terms of upward price pressure," said Frances Hudson, investment director, strategy at Standard Life Investments.
"We're reaching the peak of the driving season and I do wonder how much we are also seeing a rise in the geopolitical element of the oil price," she added, referring to attempted bombings in London last week and an attack on Glasgow airport.
Police suspect an al Qaeda plot.
Barclays Capital technical analysts wrote in a research note: "Brent has started July with a bang...indicating that its uptrend has resumed toward $76.95."
U.S. Crude Inventories
Although crude stockpiles in top consumer the United States are at a nine-year high, some analysts are forecasting they will drop rapidly as refiners there return from maintenance.
The next snapshot of U.S. fuel inventories is due on Thursday, a day later than usual because of Independence Day on July 4.
A Reuters poll pointed to a 700,000 barrels decline in crude oil inventories and a 0.9 percentage point rise in refinery operations.
The International Energy Agency, representing 26 consumer nations, repeated its call on Monday for OPEC to increase output.
So far, the group that pumps over a third of the world's oil has resisted, arguing crude oil supplies are ample and any tightness in refined products is beyond its control.
According to a Reuters survey, OPEC kept a lid on output in June, pumping 30.19 million barrels per day. The 10-members subject to production limits produced 26.64 million bpd, up 50,000 bpd against May.
"The issue is not oil production. We have enough...oil in the market," Venezuelan energy minister Rafael Ramirez told an Iranian newspaper in remarks published on Tuesday.
Refinery problems continued to plague the U.S. market, with Coffeyville Resources shutting a 108,000 barrels per day refinery in Coffeyville, Kansas following flooding.
Global Insight analyst Lawrence Poole expected U.S. pump prices to rise back to $3 a gallon. It hit a record $3.22 on May 21 but has since eased.
"Because domestic gasoline production is broadly flat, imports are down slightly and demand is expected to pick up in the next six to eight weeks, we can expect price rises in retail gasoline going forward," Poole said.