By early afternoon in Europe, benchmark crude for April delivery was up $2.43 at $100.53 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, it rose as high as $103.41.
The contract, which has soared about 20 percent since last week, jumped $2.68 to settle at $98.10 on Wednesday.
In London, Brent crude for April delivery vaulted $3.47 to $114.72 a barrel on the ICE Futures exchange, after reaching $119.79.
Libyan leader Moammar Gadhafi's grip on power slipped further as rebels took control of much of the eastern part of the country and advanced around Tripoli, the capital.
The mayhem has disrupted crude exports from Libya, which produces about 1.6 million barrels of crude per day and has the biggest oil reserves in Africa.
"With the disruptions in Libya potentially absorbing half of OPEC's spare capacity, we believe the risks now associated with further contagion are much higher," said a report from Goldman Sachs in London. "Further disruptions could create severe shortages in global oil markets that would require substantial demand rationing."
French oil giant Total said it started to wind down its operations, which average of 55,000 barrels per day last year. Libya's biggest oil producer, Italy's Eni, idled operations that produce 244,000 barrels of oil and gas per day. Spain's Repsol-YPF and Austrian oil company OMV also suspended operations. Germany's Wintershall said it shut down operations that produced up to 100,000 barrels of oil per day.
Evacuations of oil company employees and their families continue.
"Continued instability in the Middle East and North Africa will likely keep this bull move alive into the spring," Ritterbusch said. "This still feels like a market that is far from achieving a top."
The speed and scale of protests in the Arab world this year - which brought down long-standing rulers in Tunisia and Egypt and sparked anti-government protests in Yemen, Bahrain, Algeria, Morocco and Jordan - have traders worried the upheaval could spread to oil giants Saudi Arabia and Iran.
"Beyond Libya, there are a number of countries whose stability is absolutely critical to Western supplies," Cameron Hanover said in a report. "Obviously, that starts with Saudi Arabia, but the United Arab Emirates, Kuwait, Qatar and even Iraq are on the list."
"With unrest all around them, is there any really strong reason to believe that the emirates or Kuwait or even the (Saudi) kingdom itself can remain oases in this swirling, engulfing sandstorm."
Analysts estimate the turmoil in Libya has added $15 to the price of oil, and prices will likely quickly drop back down should Gadhafi resign and fighting stop.
"Libya should be both the first and the last of the major producers to see any significant disruption to oil output, allowing the risk premium to fall," said Capital Economics, which expects Brent to fall to $85 by the end of the year.
Saudi Arabia's oil minister said earlier that his country's spare capacity would be enough to cover for the shortfalls from Libya.
"Saudi oil is not a perfect substitute for Libyan oil, as the latter is low in sulfur content and is thus considered to be of higher quality," said analysts at Commerzbank in Frankfurt. "It is barely possible to estimate how high the price can rise. However, the higher it climbs, the greater the potential to fall thereafter."
In other Nymex trading in March contracts, heating oil rose 5.96 cents to $2.9645 a gallon and gasoline gained 7.73 cents to $2.7922 a gallon. Natural gas futures were down 5.2 cents at $3.848 per 1,000 cubic feet.