May 25 (Bloomberg) -- Crude oil rose in New York on speculation that yesterday's 2.4 percent drop in prices was larger than justified, and after oil workers were kidnapped in Nigeria, Africa's biggest producer.

``Some recovery is to be expected after the huge move we had yesterday,'' said Tom Bentz, an oil broker with BNP Paribas Inc. in New York. ``There are still plenty of bullish factors to be concerned about. There are more kidnappings in Nigeria and threats of strikes and violence, the Iran situation simmers and gasoline supplies are tight.''

Prices in New York fell $1.59 a barrel yesterday, the biggest one-day decline since April 9, after Valero Energy Corp. and ConocoPhillips cut production at refineries in Louisiana and Texas. Three Americans and four Britons were among a group of oil workers kidnapped in Nigeria today, according to U.S. and U.K. government spokesmen.

Crude oil for July delivery rose $1.02, or 1.6 percent, to settle at $65.20 a barrel at 2:50 p.m. on the New York Mercantile Exchange. The July futures contract fell 1.2 percent this week. Prices are 8.6 percent lower than a year ago.

Crude-oil inventories at Cushing, Oklahoma, the delivery point for Nymex futures, rose 899,000 barrels to 27.4 million barrels last week, the Energy Department reported May 23. Supplies there may continue to grow because of refinery interruptions this week.

``I don't think the likelihood of some more crude backing up was worth almost $2,'' said Michael Fitzpatrick, vice president for energy risk management at Man Financial Inc. in New York.

Peak Demand

There will be no floor trading in New York on May 28 because of the Memorial Day holiday. U.S. gasoline consumption peaks during the summer driving season, which lasts from Memorial Day to Labor Day in early September.

Gasoline for June delivery in New York rose 4.68 cents, or 2 percent, to $2.4037 a gallon, the highest close since May 18.

Regular gasoline at the pump, averaged nationwide, slipped 0.2 cent to $3.225 a gallon yesterday, according to AAA, the nation's largest motorist organization. The previous day's price was a record. Retail gasoline prices are up 12 percent from a year ago.

Brent crude oil for July settlement fell 3 cents to close at $70.69 a barrel on the London-based ICE Futures exchange. Futures touched $71.80 a barrel yesterday, the highest intraday price since Aug. 28. Brent is produced in the North Sea.

Record Premium

Brent crude oil, traditionally cheaper, cost $6.54 a barrel more than New York oil yesterday, a record premium. Brent ended today's session $5.49 a barrel higher. Rising supplies of West Texas Intermediate oil at Cushing have pushed prices for the grade lower. Brent is pulled higher by threats to supply from Nigeria and Iran.

From 1988, when London futures began trading, through 2004, Brent averaged about $1.60 a barrel less than Nymex's West Texas Intermediate crude contract. Brent and Nymex were close to each other in price last year; the unprecedented premium for Brent opened up in the past three months.

Crude oil may rise next week, according to a Bloomberg News survey. Thirteen of 36 analysts surveyed, or 36 percent, said oil prices will rise. Twelve, or 33 percent, said prices will decline and 11 forecast little change.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: May 25, 2007 15:16 EDT