Oil prices have risen to fresh highs due to a combination of the weak dollar, supply concerns in Mexico and continued tensions in northern Iraq.
By close of trade in New York, US light crude for December delivery rose by $1.67 to $93.53 a barrel, marking a record settlement price.
Light crude had hit an intraday high of $93.80. In London, Brent crude added $1.63 to settle at $90.32 a barrel.
Some analysts believe oil prices will hit $100 a barrel before year end.
"Every new bullish factor pushes US crude irrationally closer to $100 barrel," French investment bank Societe Generale said in a commentary on energy markets.
An array of factors has forced prices up, analysts said.
In past months there also have been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran, and concerns over heating supplies for the US winter.
At the same time, the US currency has fallen to a fresh low against the euro, making oil - which is priced in dollars - attractive to buy, analysts said.
Suggestions that the US Federal Reserve may cut interest rates further when it meets later this week has further hit confidence in the dollar and pushed money towards oil.
"It looks like everyone wants to sell the dollar and buy other assets, whatever assets whether they be equities or commodities," said Christoph Eibl, head of trading at Tiberius Asset Management.
In recent days, prices have spiked further on worries about disruption to a fifth of Mexican oil output following a tropical storm in the Caribbean.
On Sunday Pemex - Mexico's state-owned oil firm - said it would shut down 600,000 barrels of oil production per day in the Gulf of Mexico.
Earlier in the month, prices were driven by fears that Turkey may carry out an extensive ground assault against Kurdish rebels in Iraq.
US light crude broke through the $92 a barrel price for the first time on Friday and prices have now risen 30% since the start of August.
Efforts by producers' group Opec to restrain prices by agreeing to lift production from 1 November have so far failed to calm the market.
Taking inflation into account, prices are still below the peak of $101 a barrel seen in 1980.
But analysts are now bracing themselves for oil to approach the nominal $100 mark in the next few weeks should current conditions continue.
"I personally don't believe we will see prices at $100 a barrel but it is not impossible given the situation," said David Moore, a commodity strategist at the Commonwealth Bank of Australia. ( BBC )