Benchmark oil for May delivery gained 94 cents to finish at $103.64 a barrel on the New York Mercantile Exchange. It hit an intraday high of $104.24.
In London, Brent crude rose $1.65 to settle at $121.52 per barrel on the ICE Futures exchange.
Oil prices have been moving up ever since the US and Israel started ratcheting up tensions against Iran.
Crude has jumped from $75 in October as investors worried a military attack by Israel or the US on Iran's nuclear facilities could disrupt global crude supplies. However, oil has slid from $110 last month amid optimism meetings between Iran and the US, France, Britain, Russia, China and Germany that begin Saturday in Turkey could ease tensions.
"If negotiations were to succeed and some acceptable compromise achieved, the energy markets would breathe a collective sigh of relief and prices would decline," said Richard Soultanian of NUS Consulting. He estimated concern that Iran's crude exports will be cut by a military conflict or tighter sanctions has added about $15 to the price of oil.
US and Israeli war rhetoric against Iran have affected the market so deeply that crude prices have increased despite a weakened demand during the first three months of 2012 and an output increase by OPEC member states, according to the International Energy Agency.
"The cycle of repeatedly tightening fundamentals evident since 2009 has been broken for now," the Paris-based IEA said in its monthly oil market report. "Further surprises almost inevitably lurk around the corner for both demand and supply. But for now at least, the earlier tide of remorseless market tightening looks to have turned."
The IEA also estimated that global oil stockpiles rose by over 1 million barrels a day during the first quarter of the year.