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59 dollars to end at 64.18 dollars a barrel as traders took profits.
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In London, Brent North Sea crude for July delivery rose 12 cents to finish at 70.72 dollars per barrel, after hitting a peak of 71.80, the highest level since August 28, 2006.
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London's six-dollar price advantage over New York was unusual, since Brent typically trails the New York contract by one dollar. However, traders pointed to an abundance of crude oil in the United States, particularly in the Cushing terminal in Oklahoma were "light sweet crude" is delivered, the reference for the New York market.
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The inventories are already elevated due to numerous breakdowns and repairs at US refineries that have tied up the supply chain.
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Crude inventories have climbed by 900,000 barrels since last week to 27.4 million barrels. London's Brent found support in worries about a mounting standoff over Iran's nuclear power program. US President George W. Bush warned Thursday that the United States and its European allies would seek to toughen sanctions on Iran because it is defying United Nations demands to curb the project.
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"The market has found support in continuous geopolitical concerns, following the report by the International Atomic Energy Agency yesterday (Wednesday) on Iran's progress and expansion of its nuclear enrichment program," said Sucden analyst Andrey Kryuchenkov. On Wednesday, the UN nuclear watchdog said Iran was defying UN Security Council demands to stop enriching uranium and was expanding the work.
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Energy experts argue that Iran, the world's fourth biggest producer of oil, could retaliate with cuts to its crude exports, which in turn could push prices higher.
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Low US gasoline inventories ahead of this weekend's start of the peak driving season remained a factor.
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The US Department of Energy revealed Wednesday that American stockpiles of gasoline (petrol) remained "well below the lower end of the average range" ahead of this weekend's start of the summer driving season. "For this time of year, this is the lowest (US gasoline) supply coverage of the past five years," said Citigroup analyst Tim Evans in response to the DoE report.
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Mike Fitzpatrick of Man Financial said that gasoline levels remains the market driver. "Trading higher overnight suggests that the conclusion has been drawn that it might be too late to avoid a tight supply situation this summer," Fitzpatrick said