Tight petroleum supplies in the US and anxiety about fighting in Ukraine and Gaza pushed oil prices higher Monday.
US benchmark contract West Texas Intermediate for August delivery jumped $1.46 to $104.59 on the New York Mercantile Exchange.
European benchmark Brent oil for September delivery rose 44 cents to $107.68 a barrel in London.
Analysts said recent US oil inventory reports showing lower crude supplies were major factors behind Monday's higher prices.
Refiners, particularly in the Gulf Coast and Midwest, have been buying more oil in order to pump out more gasoline to meet higher summer driving demand.
"The physical market is tight," said Andy Lebow, senior vice president for energy derivatives at Jefferies Bache.
"There is limited availability of light sweet crude in the Cushing, Oklahoma market," said Andy Lipow, head of the consultancy Lipow Oil Associates.
Traders are scrambling to settle commitments by Tuesday's deadline for crude deliveries under the August WTI contract, analysts said.
Analysts also cited worries over potential European sanctions on Russia after Thursday's crash of a Malaysian plane and the ensuing accusations by the US and others that Russian backing of Ukrainian separatists was to blame for the disaster.
As the US leveled accusations against Russia for supplying the weapons allegedly used to shoot down the passenger jet and European leaders readied new sanctions, Moscow hit back and sought to shift the blame to Kiev.
Analysts also pointed to ongoing violence in Gaza, where the death toll Monday hit 572 following an Israeli offensive the government says is needed to counter Hamas.
"Investors... remain engaged to the unfolding situation between Ukraine, Russia and the West, as well as the ongoing Israeli ground assault of Gaza," said Sucden analyst Kash Kamal.