Crude prices spiked above USD 119 a barrel  for the first time. This was mainly led by a jump in demand from China, the world's second largest energy consumer and concerns about supplies from Russia and Nigeria.

In after hours access trading, crude is at USD 117.71/bbl.

Speaking about the suddn rally, Kirby Daley, Strategist, Newedge Group said, "We have gone very quickly from 80, 100 to 120 - these effects are going to come in the next few months and the markets have not priced that or a lot of other factors and it could well mean calamity for the markets."

Addison Armstrong, Tradition Energy, said "Recently, today specifically it has been the weakness in the dollar which has pushed oil prices very close to the 160 per euro dollar level and that would have helped push the oil prices to the 120/bbl level but I think a lot depends on what happens later in the month with the Fed meeting."

Willis Sparks, Eurasia Group said, "The financial markets have absorbed some pretty high oil prices. To this point, we keep talking of some upward pressure in the oil prices and the effect that it is going to have on the demand and I think eventually we will have a tipping point and I am not sure when we are going to reach that."