Prices had last set a record of 70.85 dollars on August 30 when Hurricane Katrina hammered oil production facilities in the US Gulf of Mexico region.

At 0130 GMT, Brent North Sea crude traded for 71.40 dollars a barrel, up from the closing level on Thursday in London of 70.57 dollars.

Prices eased later in London trade on Monday to 71.06 dollars a barrel at 1200 GMT.

New York's main contract light, light sweet crude for May delivery, was up 50 cents at 69.82 dollars a barrel from its close of 69.32 dollars in US trading on Thursday. US markets then closed for the Good Friday holiday.

Two key issues were driving the market, said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"One is the gasoline supply situation in the US and two is the issue over Iran," he said. "The issue is still there and it will continue to be with us."

Concerns about a possible US-Iran clash heightened Sunday after Tehran warned Washington against attacking Iranian nuclear facilities, saying it had tens of thousands of would-be suicide bombers at the ready and could count on the support of militants across the region.

"The United States should be aware that it is not in a position to create another crisis in the region," Iranian Foreign Minister Manouchehr Mottaki said.

The crisis over Iran's nuclear ambitions has deepened since Tehran announced that scientists had managed to enrich uranium to the level needed to make reactor fuel.

Iran insists its programme is peaceful but Washington and its allies think the Islamic republic wants to develop a nuclear bomb.

The United States is now pushing for tough UN action, with several US press reports saying that military options were being developed.

A report in the New York Times added that an assertion by Iranian president Mahmoud Ahmadinejad suggested that even as Iran began to enrich small amounts of uranium, it was pursuing a far more sophisticated way of making atomic fuel.

Traders worry that US-led military action would disrupt vital oil supplies from Iran, which is the world's fourth-largest producer of crude with an output of four million barrels per day.

Concerns over US gasoline supplies also helped push prices up after the latest Department of Energy report showed another drop in petroleum stocks.

Gasoline inventories slumped 3.9 million barrels to 207.9 million in the week to April 7, according to the DoE. Analysts had expected a drop of just 2.1 million barrels.

Gasoline supplies have lost a total of 18 million barrels in six weeks and are 1.9 percent below their level a year ago.

Dealers said the figures reinforced concern about gasoline constraints ahead of the peak-demand US summer holiday season, which begins in late May.

"Crude inventory went up and the market is concerned about the continuing gasoline stock draw in the US market and the peak summer driving season," Shum said.

Adjusted for inflation, prices nonetheless remained well below levels reached after the 1979 Iranian revolution when they surged to more than 80 dollars a barrel in today's money.

On Wednesday however, the IMF is expected to warn of the pernicious effect of persistent high oil prices, according to early extracts of its Spring 2006 World Economic Outlook.

High energy costs account for about half of the deepening of the US deficit between 2001 and 2005, according to the IMF.

Last year the US current account deficit reached a record 804.9 billion dollars, equivalent to 6.4 percent of Gross Domestic Product (GDP).

Finally, in a development that may have helped ease prices, Chad said it had pushed back to the end of April the date on which it would halt oil production if the World Bank did not unblock a Citibank account in London.

All rights reserved. © 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.