Oil prices rose to close to $80 as Tropical Storm Bonnie swirled towards the Gulf of Mexico, and traders awaited European banking stress test results for hints on the economic outlook.
US crude for delivery in September hit $79.60 per barrel - last seen on 5 May, winning support also from the weak US currency.
It later stood at $78.98, down $0.32 from yesterday's close.
London Brent North Sea crude for September meanwhile weakened by $0.36 to $77.46 in early afternoon deals.
The crude market had soared yesterday as stock markets rallied on upbeat US company results, and as Tropical Storm Bonnie moved towards the oil-producing region of the Gulf of Mexico.
The 'stress test' results from the London-based Committee of European Banking Supervisors, due later, should for a clearer picture of the global economic outlook.
