NEW YORK--Oil futures slipped Thursday as traders who had bet on higher prices locked in profits after Wednesday's rally, while gasoline futures hit a three-week high on expectations of rising demand.

Light, sweet crude for July delivery settled down 33 cents, or 0.3%, at $103.74 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 19 cents, or 0.2%, to $110.36 a barrel.

Oil prices rose to a one-month high Wednesday after weekly government data showed that U.S. oil supplies unexpectedly fell by 7.2 million barrels last week. The decline was largely due to a drop in imports to the lowest weekly level since 1997.

However, domestic oil supplies are just 2% below the record high reached April 25.

"We had a pretty incredible run this week," said Phil Flynn, analyst at Price Futures Group in Chicago. "We're really catching our breath up here...because we're pretty well-supplied right now."

Meanwhile, gasoline futures climbed to a three-week high on expectations that demand would pick up as travelers hit the road during the Memorial Day holiday.

Front-month June reformulated gasoline blendstock, or RBOB, settled up 1.16 cents, or 0.4%, at $3.0058 a gallon, the highest settlement price since April 30.

Automobile club AAA expects 36.1 million Americans to drive 50 miles or more during the upcoming Memorial Day weekend, the second-highest level since 2000. The holiday weekend is considered the start of the summer-driving season.

"I think it's going to be a pretty decent summer season," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "I actually expect to see demand tick up."

June diesel settled down 0.26 cent, or 0.1%, at $2.9507 a gallon.