Oil beats two-year record: around $96 a barrel

In London, Brent crude for April delivery gained $1.65 to $107.43 a barrel on the ICE Futures exchange.

Goldman, which is forecasting benchmark crude to rise to $103 within 12 months, said recent violent protests in Bahrain show that wealthy oil-rich Gulf states are also vulnerable to political upheaval.

Futures. When Egyptian President Hosni Mubarak resigned earlier this month, oil prices gave back several dollars and fell below $87 a barrel.

So, oil prices could easily fall back if Gadhafi suddenly steps down.

Investors will remember what happened back in mid-2008, when oil came close to hitting $150. Six months later it was back around $40, but it had already contributed to the rout in equities which were getting hammered as the financial crisis took hold.