Light, sweet crude oil for January delivery on the New York Mercantile Exchange (Nymex) closed up 30 cents at 48.94 dollars a barrel.
However, in earlier trading New York oil had broken through 50 dollars to strike 50.25 dollars, its highest level since November 4.
In London, Brent North Sea crude oil for January delivery rose seven cents to 44.45 dollars a barrel, after earlier surging 1.12 dollars to 45.50 dollars.
Traders in New York said prices had spiked over concerns about oil inventories as the winter closes in on the continental United States.
“Everybody will be looking at inventories for direction … if (there is) any draw (prices) could easily go back and test 50 dollars and perhaps go a bit higher,” said Refco analyst, Marshall Steeves.
The US government and the industry group, the American Petroleum Institute, are due to report weekly US stock inventories Wednesday.
However, the London oil market had also jumped on fears that the looming European winter could also draw down available supplies.
Markets were jumpy ahead of the weekly US oil inventory data, given that “heating oil and distillate stocks are so low for this time of the year,” said London-based Investec Securities analyst Bruce Evers.
He said an explosion in Iraq also seriously affected exports through the south of the country.
Analysts said the release of weekly US oil inventory figures from the US Department of Energy would have a bearing on the direction of crude futures.
“Prices have been very volatile since last week when we had the US inventories data showing that (distillate) stocks were very low, 14 percent lower than a year ago,” said Richard Slape, an analyst at stockbroker Seymour Pierce.
“Winter is approaching rapidly, which doesn’t leave us with a margin of error. There is now a spell of cold weather in Europe and the prices are going up,” he said.
Oil prices have fallen by about 16 percent in New York from all-time highs last month, but remain up 44 percent so far this year.
Analysts said prices were also drawing support from expectations that the OPEC cartel will soon reduce its output, after opening the taps wide in recent months to try to control skyrocketing prices.
OPEC ministers are due to meet next in Cairo on December 10.