Oil steady above $70; terror risk considered

SINGAPORE (Reuters) -- Oil prices steadied Monday, the start of a holiday-shortened week, as traders looked ahead to a recovery in U.S. refinery use to offset declining gasoline stockpiles.
U.S. light crude eased 13 cents to $70.55 a barrel in electronic trading, after a $1.11 rally Friday to the highest settlement since August 2006. London Brent crude traded 9 cents lower at $71.32, after gaining 89 cents Friday.
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Oil traders worried about geopolitical supply risks saw London's Heathrow airport and New York's JFK terminal reopened Sunday after bomb scares, following an explosion at a Scottish airport Saturday and failed car bombing attempts in London.
"We can see some profit taking after short covering brought the market up to $71," said Ken Hasegawa at Himiwari CX in Tokyo. "The market will be rangebound until the U.S. holiday."
Wednesday's Independence Day holiday will delay until Thursday weekly U.S. inventory data, in which some analysts expect to see higher U.S. fuel production after several plants returned from maintenance.
Retail gasoline price dips below $3
ConocoPhillips (Charts, Fortune 500) planned to begin a restart of a gasoline-making unit in Texas Friday, while two crude units at a BP (Charts) refinery in Indiana, the country's fifth biggest, will reach full rates within two to three weeks after a fire slashed output in April.
A series of outages in the world's top consumer has helped drive down gasoline stockpiles during peak summer demand, though crude stockpiles have risen to nine-year highs despite OPEC production cuts.
Oil market speculators trimmed their exposure to rising prices in the week ended June 26, paring their net long gasoline and heating oil positions from the previous week's multi-year highs. Crude oil net length was almost unchanged.
Crude stockpiles in Cushing, Okla. - the delivery point for U.S. crude futures - fell by 1.4 million barrels in last week's data, leaving the price gap between American and European oil benchmarks at under $1 a barrel after U.S. crude has been trading at an atypical discount to Brent since February.
Iran's dispute with the West over the country's nuclear program is still in focus after an Iranian official said Saturday a team from the U.N. nuclear watchdog will visit Iran on July 11-13 for discussions.Worries over Iran's nuclear dispute together with disruptions to Nigerian supplies, OPEC supply curbs and growing fuel demand have left Brent oil prices up 17 percent this year.