US light crude closed 35 cents, or 0.5 percent, higher at $71.31 a barrel, also not far off the day's peak at $71.92, its highest since November 2014.
The price spread between USA benchmark WTI and Brent has widened to more than $7 a barrel.
World oil prices have surged by more than 70 percent over the past year as demand has risen sharply but production has been restricted by the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and other producers including Russian Federation. The coming US sanctions pushed up oil prices last week after President Donald Trump withdrew the United States from the nuclear deal.
Iran will restart its uranium enrichment if it can not find a way to save the 2015 nuclear deal with the European Union after the United States pulled out last week, Tehran's government spokesman said.
Despite Wednesday's dips and some indicators implying the financial oil has overshot physical oil, overall crude market conditions have tightened since 2017 when the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, started to withhold supplies to push up oil prices.
Additionally, the market retreated as the USA dollar .DXY strengthened against other currencies to the highest since December.
"A rising oil price brings upside price risk to all commodities", Morgan Stanley said in a note to clients this week. Concerns over the impact of U.S. re-sanctioning on Iran apart from other factors like economic crisis in Venezuela are keeping the oil prices high.
The agency estimates that global oil inventories fell an average of almost 0.6 million barrels per day (bpd) in each of the past five quarters (January 2017 through March 2018).
OPEC crude production eased by 130,000 barrels per day (b/d) in April, to 31.65 mb/d, on further declines in Venezuela and lower output in Africa, the International Energy Agency (IEA) said in its Oil Market Report.
The key oil demand growth center-China-has just beaten its own imports and refinery runs records, as refined oil product exports jump and domestic crude oil production hits seven-year-lows.