(Oil prices story updated for Libya political events, energy market oil price forecasts)NEW YORK ( TheStreet) -- Oil prices continued to surge on Thursday a with the escalation of violence in Libya and market fears of still higher oil prices. Brent crude reached as high as $119 on Thursday before pulling back to $114. U.S. crude was above the $101 in pre-market trading. The only event that seems to scare the markets as much as fear of the political events in the Middle East spreading to Saudi Arabia is fear of $4 -- maybe even $5 -- gasoline at the pump in the U.S. The fears were continuing to escalate on Thursday morning. Goldman Sachs warned of fear of global oil shortages as a trigger for a continued surge in oil prices. BNP Paribas raised its second quarter 2011 average oil price forecast to $105 for U.S. crude and $117 for brent crude. The CEO of Italy's Eni ( E), which is most exposed to Libyan production among foreign oil companies, said on Thursday that Libyan oil production had declined by 75%. The surge in Brent crude and U.S. oil futures continues to set new highs and evoke memories of oil prices last seen in the days leading up the the fall of 2008 financial crisis. For investors, the mere mention of the fall of 2008 could create queasiness in the stomach. It was July 2008 when oil hit a record price of $147, and it was shortly thereafter, in the fall of 2008, that the markets truly collapsed. Sure, there was a little thing called the Lehman Brothers bankruptcy and financial crisis that caused the market implosion. However, for some market pundits, like former CIBC World Markets chief economist Jeff Rubin, it's the price of crude oil that has the lasting power to sink the global economy. The year began with bullish energy market commentary about oil easily surpassing the $100 mark, yet the optimistic outlook for crude wasn't linked to a potential slowdown in the global economy until the Middle East unrest ensued, and now, the market jitters are apparent as oil prices hit levels not seen since right before the 2008 crash. Nevertheless, oil price commentators like Jeff Rubin have been making the case since the fall of 2008 that the global economy has done nothing to de-link itself from a rising price of oil. As long as transportation is dependent on oil, a higher price of oil is embedded in the global economy and ultimately will lead to significant shocks for the system. Indeed, market commentators were beginning to speculate this week that OPEC would step in to add production and keep oil in a range between $90 and $100. The FT reported on Thursday that Saudi Arabia is considering increasing its oil output centers on the Saudi's diverting oil intended for Asia to Europe, or potentially sending more oil to Asia while Western African oil usually sent to Asia is diverted to Europe.