Opec's president has said he will ask for the cartel to raise its output as oil prices surged to new records as Hurricane Katrina hit US production.
It is difficult to estimate how much havoc a hurricane will wreak
In the US, crude contracts for October rose almost $5 to $70.80 in electronic trade before ending $1.07 up at $67.20.
Opec head Sheikh Ahmad al-Fahd al-Sabah vowed to call for a 500,000 barrels a day rise in output at its next meeting.
The move was a bid to calm supply fears which have risen as the hurricane shut down production in the Gulf of Mexico.
Kuwaiti oil minister Sheikh Ahmad also made clear the increase he wants will be above the amount Opec supplies to the market - as the cartel usually produces more than its stated limit.
"We are trying to do everything to stabilize the prices. It looks like the prices are not related to the production anymore. They are related to other factors, like geopolitics, the weather, the refining," he told reporters.
Concerns that supply will fail to meet demand along with political uncertainty in key supplier nations have increased fears that prices could breach the $100 a barrel mark.
At least eight refineries - equating to 2.37 million barrels a day of refining capacity - in the path of Katrina in the Gulf shut down or cut their operations by Monday, according to company and government reports.
One report from Mineral Management Services said crude oil production had been cut by about 91%, or 1.37 million barrels.
In an effort to calm supply fears the US government said it was willing to consider loaning crude oil from its emergency stockpiles to American refiners.
"It's not only the suspension of production that's causing concern, it's the fact that we could see potential damage to the platforms, which would cause longer disruptions to production," said Victor Shum, an analyst at Purvin & Gertz.
"It looks like the perfect storm to drive prices up."
In the US, thousands of people were evacuated from New Orleans and Louisiana before Katrina made landfall early on Monday.
The concern is that if oil climbs higher, people will stop spending
"We can expect two months of lost production, and coming in the peak demand period this is the worst possible news," said David Thurtell, a strategist at the Commonwealth Bank of Australia.
As well as damage to equipment and production plants, there are mounting concerns about the effect higher oil prices will have on the world economy.
The more people have to pay for everyday goods such as petrol and necessities such as heating, the less they will have to spend in shops.
A surprise drop in US consumer sentiment during August was blamed on high fuel prices.
Any spending slowdown is likely to prove problematic, especially in the US and Europe, where some of the region's largest economies already are struggling to boost growth.