The surge could add pressure on oil cartel OPEC to boost production when it meets in Vienna next week, though members have said they see no shortage of supply in the world market and are unlikely to raise output.
U.S. crude surged $2.95 to settle at $102.59 a barrel after hitting $102.97, shattering the inflation-adjusted high of $102.53 reached in 1980, a year after the Iranian revolution. London Brent crude gained $2.63 at $100.90 a barrel after the European benchmark hit a record $101.24.
The gains come amid a broad-based commodities rally fueled in part by expectations the U.S. Federal Reserve will continue to aggressively cut interest rates to battle an economic slowdown in the world's biggest energy consumer, speeding up the rate of inflation.
Oil extended its gains late Thursday after a fire at the Bacton Gas Shell terminal in Norfolk, England, shut over 45 million cubic meters per day of gas supplies, about 13 percent of the UK national grid's forecast demand.