U.S. light crude struck $44.77 a barrel, the highest level in the 21-year history of crude futures on the New York Mercantile Exchange (search), before easing back to settle at $43.95, down 46 cents from Thursday's settlement.
London's Brent crude hit $41.50 a barrel, a record for the contract since it started trading in 1988 on the International Petroleum Exchange (search). Brent eased to $40.65 by midday, down 49 cents.
"Fifty, sixty dollars a barrel is thinkable for the first time since 1979 ... but so much has changed between then and now that prices might have to go even higher before demand growth slows down," said Deborah White, senior economist at SG Commodities in Paris.
Oil has rallied more than 30 percent this year as rapid demand growth, especially in the United States and China, leaves little leeway for any supply disruptions. Consumption is accelerating at the fastest pace in more than 20 years.
The latest in a string of rallies this week gathered strength after a financial source said Russian oil major YUKOS had no money in its bank accounts after bailiffs seized a total of $900 million by Thursday to put toward payment of the firm's huge back tax bill.
"All revenues coming into our bank accounts are immediately transferred (by bailiffs) to the public exchequer. As of Thursday a total of $900 million had been written off. It is definitely a threat to our operations," a YUKOS source told Reuters.
YUKOS, which pumps 1.7 million bpd, or 2 percent of world supplies, has repeatedly warned it needs at least $400 million on its Russian bank accounts to fund core operations such as transportation fees to ensure oil exports.
It has said it had pre-paid August transportation fees to pipeline monopoly Transneft (search) but would need to find money by the middle of August to pay for exports in September.
Fears about the vulnerability of overstretched supplies have prompted several governments to seek to boost strategic stockpiles of oil.
The U.S. Interior Department on Friday said it expects the U.S. Strategic Petroleum Reserve (search) to be filled to its 700 million barrel capacity by the middle of next year.
The Organization of the Petroleum Exporting Countries (search), which controls around half of the world's crude exports, is pumping at the highest levels since 1979 as it tries to stem oil's relentless price rise.
OPEC President Purnomo Yusgiantoro on Friday said output was running at 30 million barrels daily and the group was ready to lift production by 1 million to 1.5 million bpd if deemed necessary when ministers next meet.
OPEC ministers are scheduled to meet in Vienna on Sept. 15 to review output policy, but only Saudi Arabia, the world's top exporter, has any significant spare capacity to increase supply.
OPEC lifted its official output limits by 500,000 bpd to 26 million bpd on Aug. 1. The limits exclude Iraq, which is struggling to rebuild its oil industry after the 2003 war and a spate of sabotage attacks on key pipelines earlier this year.
Iraqi exports ran at about 1.5 million bpd in July and are expected to rise to between 1.7 and 1.8 million bpd this month.
The U.S. Labor Department (search) on Friday said U.S. payrolls had risen by a mere 32,000 in July, a number described by one analyst as "a huge disappointment."
The figure drove stock markets weaker, with the Dow Jones industrial average closing down 147 points.
Oil analysts, however, said they saw little immediate chance of oil prices collapsing, especially as supply concerns persist.