Driven by surging demand and continuing supply concerns, US light crude reached $125.98 by early afternoon in Europe, up $2.29 from Thursday's close.
Meanwhile, London's Brent crude was also at a fresh high of $125.68.
Earlier this week, a report by Goldman Sachs said the price of crude oil could reach $200 a barrel in as little as six months, as supplies tighten.
Despite the continuing rises in oil prices, producers group Opec reiterated its view on Thursday that supplies were adequate for the time being.
However, it has also said that $200 a barrel was a possibility in the future.