NEW YORK (CNNMoney) -- Oil prices jumped more than $2 a barrel in electronic trading Sunday following escalating violence in Libya, where the military called for an immediate cease-fire after allied forces fired on Libyan defense sites.
"It seems like things have stepped up and that means more uncertainty," said Peter Beutel, an oil analyst with Cameron Hanover. "Every incident that you have expands [uncertainty]."
The benchmark U.S. contract, West Texas Intermediate, for April delivery gained $1.95 to $103.02 a barrel. The more active May contract jumped $2.08 to $103.93 a barrel.
That's still comfortably below the $106.95-a-barrel high hit two weeks ago, but Beutel said he expects volatility to rule the day.
"[Volatility] just possibly couldn't get any higher," he said, adding that he wouldn't be surprised to see prices go up by $50 and then drop $100 over the course of the year. "Volatility is getting worse and worse each day."
Meanwhile, brent crude, the main European contract, rose $1.05 to $114.98 a barrel.
While Libya is Africa's third-largest oil producer and sits atop the continent's largest reserves, the country only contributes about 2% of the 87.5 million barrels of oil the world consumes every day.
Earlier this month, the International Energy Agency estimated roughly 1 million barrels per day of Libyan oil had been taken off the world market so far.
Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries have pledged to increase production to make up for any lost oil due to unrest in Libya.
But concerns are less about Libyan production and more about how far the problems will spread.
Traders are worried about growing conflict in the Middle East, following protests in Yemen, Bahrain and Oman.
"It's spreading closer and closer to the Petroleum Gulf," said Beutel, and that's what's fraying investors' nerves.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.04%||4.00%|
|15 yr fixed||3.19%||3.15%|
|30 yr refi||4.08%||4.04%|
|15 yr refi||3.21%||3.16%|
Today's featured rates:
Shares of Corona distributor Constellation Brands have dropped 10% since the election due to concerns about how Trump's tax and immigration policies will impact the beer company. More
Congressional Republicans will have to spend billions on Obamacare subsidies, even as they move to repeal the law. More
Microsoft CEO Satya Nadella is confident about his company's role as a job creator, even as Trump puts other CEOs on edge. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Rhode Island Governor Gina Raimondo wants to make two years of tuition free for residents enrolled at public colleges. More