Concerns that a political crisis in Egypt could disrupt oil supplies from the Middle East should linger for a while and could boost crude a further $4 to $5 a barrel if violence continues, analysts say.
U.S. oil prices climbed above $102 a barrel to levels not seen since May 2012 on Wednesday, while Brent crude oil futures hit a two-week high just above $106 and held within sight of that level in European trade on Thursday.
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"If we were to see any disruptions to supply we could see Brent go to $110 per barrel this month, we may even see it this week," said Sandu Avtar, senior manager of commodities at Singapore-based financial services firm Phillip Futures.
"WTI [West Texas Intermediate oil] prices could stretch to $106 per barrel if the crisis is prolonged," he added.
Egypt's energy infrastructure is vital to transporting oil supplies around the world. It is home to major pipelines such as the Sumed pipeline, and the Suez Canal - one of the world's busiest shipping lanes.
That's why the turmoil in Egypt has unnerved oil markets. On Wednesday, the military ousted President Mohamed Morsi, but tens of thousands of his supporters, including the Muslim Brotherhood that backed him, rallied to protest against his removal.
(Read More: Ouster Brings Cheer in Egypt, but Caution in Markets)
"Now the ball is in the court of the Muslim Brotherhood. If they take it [the military ousting] lying down and a new democracy comes in that should stabilize things," said Avtar.
Victor Shum, vice president of Asia-Pacific at research house IHS Energy Insight, said the crisis in Egypt has injected a "geopolitical premium" into the price of oil.
"In the broader market, the supply of oil is outpacing demand so pricing ought to be low… A large part of the volatility has been the uncertainty, investors are in wait and see mode," he said.
Shum said a spike in Brent crude to $110 per barrel and WTI to $106 per barrel was "within the realms of possibility."
"If violence gets more severe, or it spreads to other countries…. or if a vessel passing through the Suez Canal gets disrupted, or even if there is a perception of a disruption, we could see a spike," he said.
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Azlin Ahmad, crude oil editor at Argus Media, said the Egyptian army has stepped up security around Egypt's energy infrastructure this week, but added that the situation was volatile.
"At the moment it looks like the traffic has not been interrupted. Obviously the Suez Canal is a very vital transit route and also the Sumed pipeline which transports more than 2 million barrels of oil per day," she said.
(Read More: Egypt's Economic Lifeline, Suez Canal, Stays Open)
"The army is increasing security around the canal and the facility. At this point it looks like they are holding on to it but it is all very volatile, so it will have to be a wait and watch situation," she added.
Other analysts played down the impact of the Egypt crisis on oil prices.
"The Suez Canal will remain functional regardless of who is in power and that's the important thing for oil markets," said Mark Matthews, head of research for Asia at Bank Julius Baer.
Still, there are other factors putting upward pressure on crude such as signs of tight supply, analysts said.
The U.S. Energy Information Administration said on Wednesday that crude oil supplies fell by a bigger-than-expected 10.3 billion barrels for the week ended June 28.
"Recent U.S. data showing that supply is slightly tighter has been exacerbated by the Egypt crisis," said Avtar at Phillip Futures.
(Read More: With Military Takeover, What Now for Egypt?)
—By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie