On the New York Mercantile Exchange, light, sweet crude oil futures for September delivery touched as high as 64 dollars a barrel during intraday trading before settling at 63.94 dollars per barrel, up 1.63 dollars. Meanwhile, on London's International Petroleum Exchange, the September Brent crude oil futures climbed 1.63 dollars to close at 62.70 dollars per barrel.
The United States would close its Saudi Arabian embassy in Riyadh and consulates in other two cities in response to threats against its diplomatic missions in the country. Traders worried that a possible terrorist attack would strained the supplies from Saudi Arabia, the world's largest oil exporter.
While US refineries were using 90 percent of their capacity to meet the surging demand, many analysts and traders feared that a significant supply disruption would make it harder for US refineries to meet the need.
In the four weeks to July 19, US gasoline use rose 1.1 percent from a year earlier, to 9.5 million barrels a day, while demand for distillates, which included heating oil and diesel, climbed 4.2 percent, according to the Energy Department's report last week.
Analysts widely expected oil prices to hit 65 dollars per barrel soon as many large speculators continued to bet on high prices. Oil for delivery in January through March next year already closed above 66 dollars a barrel.