New York’s main contract, light sweet crude for delivery in February, jumped .52 to close at .35 a barrel. The contract expired at the close of trade.

In London, the price of Brent North Sea crude for March delivery gained .20 to end at .43 a barrel.

On both sides of the Atlantic, crude futures are testing highs not seen since late September. Traders said the record high reached on August 30 in New York — .85 a barrel — was in sight.

"There is nothing in the market that says prices should come off at the moment," said Man Financial trader Lee Elliott.

There was a "strong possibility" of new records as early as the end of next week, he said. "You would not want to sell on the back" of the terrorism threat and problems in Iran and Nigeria.

The United States rejected a truce offer purportedly from al-Qaeda chief Osama bin Laden, made in an audiotape broadcast Thursday over Al-Jazeera television, despite a threat of more attacks on its soil.

Nigerian oil workers’ unions meanwhile threatened Friday to withdraw their members from the troubled Niger delta region if the government fails to stop continuing violence there. Armed rebels have threatened further attacks.

Anglo-Dutch energy giant Shell, Nigeria’s biggest producer, has been forced to cut output by 226,000 barrels of crude per day since the crisis began, some eight percent of Nigeria’s daily output of 2.6 million barrels.

"The market was concentrating on Nigeria, Iran and the latest bin Laden tape," WTRG Economics analyst James Williams said.

"Of the three Nigeria is of primary importance in the short term. It is a real threat, a current threat and involves tangible barrels of oil," he said.

Iran, the second-biggest crude producer in the Organization of Petroleum Exporting Countries, asked the cartel to reduce its oil production quota by one million barrels per day (bpd) from April.

The comments came as a crisis simmers over Iran, with Tehran warning the West that UN sanctions over its controversial nuclear programme could provoke a world oil crisis and even higher prices.

"OPEC should not postpone the issue of output reduction," Iran’s OPEC representative, Hossein Kazempour Ardebili, said ahead of a January 31 meeting of the cartel.

"Iran has called for carrying out discussions and making decisions for a one million bpd of oil output cut in the second quarter."

OPEC’s production ceiling stands at 28 million bpd. At its last meeting in Kuwait on December 12, the cartel decided not to renew an offer of two million bpd in emergency additional output.