Oil prices closed Thursday at their highest level in nearly two months, breaking $67 a barrel on worries over gasoline supplies ahead of the summer driving season.

Oil dealers closely watched a simmering dispute between OPEC member Iran and the West after Tehran rejected a U.N. demand that it halt uranium enrichment.

U.S. crude closed up 70 cents at $67.15 a barrel, tracking a surge in gasoline futures to a five-month high around $2 a gallon. In intraday trade, prices reached $67.30, their highest level since Feb. 1.