Manouchehr Takin, a London energies analyst, told Al Jazeera on Wednesday: "The fundamental level of supply and demand has changed.
"Usually at this time of year there is an increase in inventories [but] this year the amount stored … is lower".
The surge brings oil close to the peak of more than $101 hit in 1980 when war between OPEC producers Iran and Iraq led to an oil supply crisis.
One of the countries benefiting most from the price rise is Venezuela, a country whose president, Hugo Chavez, is an outspoken critic of the US.
Caracas has announced it is ready to provide a major increase in oil production under a deal it has struck with the Chinese government ... pledging half-a-million barrels a day to a nation whose demand is now approaching that of the US.
Current demand - fuelled by rapid economic growth in China and a steady increase from the US - has been a major driver behind oil prices more-than-quadrupling since 2002.
China is expected to overtake the United States as the world's top energy consumer soon after 2010, the International Energy Agency (IEA) said on Wednesday.