Brent crude oil hit a high for the year above $67 a barrel on Tuesday after protests stopped crude flows to the eastern Libyan oil port of Zueitina, hampering exports.
Zueitina was one of the few Libyan ports still exporting oil as many others have closed due to fighting or disruptions at oilfields since the ousting of former dictator Muammar Gaddafi.
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"The protesters closed the pipeline to the port," Mohamed El Harari, spokesman for state oil firm NOC, said, adding that several oilfields in eastern Libya would have to close.
Libyan oil output is now below 500,000 barrels per day (bpd), officials say, a third of what Libya pumped before 2010.
A strong dollar also weighed on oil, making the commodity more expensive for holders of other currencies.
Brent crude oil climbed to $67.12 a barrel, up 67 cents and its highest since Dec. 8, before easing back slightly to around $67.00 by 1125 GMT.
U.S. crude oil was up 60 cents at $59.53 a barrel. The U.S. contract hit a 2015 high of $59.90 on May 1.
"Momentum is key here," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "The rally is feeding itself with a lot of money looking for buying opportunities."
Hedge funds and money managers raised bets on rising Brent prices to another record, data showed on Monday, pushing net long positions to their highest since official exchange records began in 2011.
Civil war in Yemen has kept the oil market on edge, underpinning prices due to the risk of disruption to oil supplies from the country's northern neighbor, Saudi Arabia, or other Middle East Gulf producers.
The Saudi foreign minister said on Monday the Saudi-led alliance bombing Houthi fighters in Yemen might call a truce in some areas to allow in humanitarian aid.
The oil market is extremely well supplied with producers of the Organization of the Petroleum Exporting Countries pumping almost 2 million bpd more than demand for their oil.
OPEC meets next month to discuss production policy but analysts see little chance that it will retrain output as members battle for market share.
Investors awaited data on U.S. crude oil stocks.
A Reuters poll on Monday said commercial crude stocks may have risen by nearly 2 million barrels last week, building for a record 17th straight week.
The U.S. Energy Information Administration will publish its report on oil inventories on Wednesday. (Additional reporting by Jessica Jaganathan; Editing by William Hardy and Jason Neely)