Oil prices have jumped on fears that escalating tensions in the Middle East could hit supplies as Western forces prepared to bomb the Libyan regime after the UN backed international military action.
Brent crude rose to $116.40 – up $9 in two days.
The UN voted to adopt a resolution that establishes a no-fly zone over Libya, that demands a cease-fire with rebels and that grants military authority to the US and its allies to protect civilians and population centers.
The worry for markets is that bombing raids against Colonel Gaddafi's forces would cut in oil supply from the North African nation.
Violent clashes in Bahrain have pushed up prices this week after it slid to around $107 on the belief that earthquake and tsunami in Japan would hit demand.
Markets are concerned that a crackdown on Shi'ite protesters in Bahrain but the nation's Sunni rulers could hit major oil producers Saudi Arabia and Iran as tensions between Sunni and Shiite Muslims increase.
The Swiss banks raised its 2010 average forecast to $103.75 a barrel from $85 a barrel. The 2012 forecast was increased by 12pc to $95, The Telegraph reports.
