New York's main contract, light sweet crude for delivery in April, rose 26 cents to $51.75 a barrel on Monday - its highest closing price since hitting a record of $55.67 last October.
In London, the price of Brent North Sea crude oil for delivery in April gained 45 cents to close at $50.06 a barrel after hitting an intra-day high of $50.34. The closing price was the highest since 27 October 2004.
A blast of winter in the northeast US and in Europe caused a run on heating oil that pushed up crude oil as well.
"Obviously the cold weather in the [US] northeast is partially responsible" for the jump, said Jason Schenker at Wachovia
But he said the 16 March meeting of the Organisation of Petroleum Exporting Countries was another reason for concern, since the cartel may seek to cut production levels.
"The impending Opec meeting in Iran brings concerns about global demand," Schenker added. "I think until the Opec meeting we could see prices in this range."
Oil prices have stayed above the
$44 mark for several months
The market was still reacting to comments by Saudi Arabia's Oil Minister Ali al-Nuaimi, who last week said he expected to see oil prices in the $40-50 per barrel range this year.
"Al-Nuaimi is the Alan Greenspan of oil and he had shivers going down the spines of long-time Opec watchers," said Alaron Trading analyst Phil Flynn as he compared the oil minister to the chairman of the US Federal Reserve.
Al-Nuaimi, representing Opec's largest crude oil producer, made his comments last Thursday as the 11-nation cartel prepared to meet on 16 March in Isfahan, Iran.
"The comments send a signal to the market of the kind of range that Opec may be likely to adopt, possibly as early as its March meeting in Iran, following the temporary abandonment of its 22-28 barrel price range for its reference basket at its last meeting in January," Barclays Capital analyst Kevin Norrish said.
Opec had adopted the target price band in early 2000 but prices have soared well above that in the last year, reaching a high of over $55 a barrel in New York trading last October.
"[Al-Nuaimi's] comments send a signal to the market of the kind of range that Opec may be likely to adopt, possibly as early as its March meeting in Iran"
Barclays Capital analyst
Meanwhile, a senior Iranian oil official said prices were at an
"appropriate level" and OPEC might leave output quotas unchanged, the state IRNA news agency reported.