Oil rises $1 as Iran vows to pursue atomic work

"The bottom line is that Iranians will not accept the proposal, which means the U.N. will be talking about sanctions," said Adam Sieminski, chief energy economist at Deutsche Bank. "We could be in for a period of oil-price strength now, after a week and a half of declines."

U.S. crude last traded $1.41 higher at $72.55 a barrel. London Brent crude rose $1.14 to $73.44.

The United Nations Security Council has demanded that Iran halt its nuclear work by a second deadline of Aug. 31, raising the prospect of punitive action by the U.N.

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