US crude for April delivery rose 2.8 percent to settle at US$98.10 per barrel after soaring as high as US$100.

Brent, which has posted the biggest three-day gain since October 2009, rose 5.3 percent to settle at US$111.25, its highest close since before the collapse of US investment bank Lehman Brothers in 2008.

The standoff between an increasingly isolated Libyan strongman Muammar Gaddafi and rebel factions now in control of oil-rich eastern Libya has cut output in the world's No. 12 crude exporter by at least 25 percent, or 400,000 barrels a day.

Austria's OMV was the latest oil company to confirm it was cutting production in Libya, although some crude shipments were still leaving the country, with at least three oil tankers dispatched since Tuesday.

The unrest has traders wondering when OPEC and its kingpin producer Saudi Arabia could boost oil output and stem the price surge. Saudi officials have said the kingdom, which holds the bulk of OPEC's spare production capacity, would act to make up for any major disruption.