Brent crude held above $114 today, extending the gains of the previous week on hopes of steady demand growth as concerns over Europe's debt crisis eased, with Italy and Greece putting in place new governments to shore up the countries' finances.
Most markets, from Asian stocks and the euro to precious metals, rose in hopes the new leaders will push through reforms and austerity measures to save their nations from bankruptcy and fend off a wider financial meltdown.
Oil also gained on concerns the crisis over Iran's nuclear programme will worsen.
Brent crude gained 50 cents to $114.66 a barrel by 8am, after rising to as much as $114.83. US oil traded 19 cents higher at $99.18, after touching $99.69, the highest since July.
On Friday, the US benchmark closed at a 15-week high and posted a sixth consecutive weekly gain, while Brent pushed higher for a third straight week.
"US crude prices have a further upside towards $102 this week, based on technicals and support from developments in Europe," said Ken Hasegawa, a commodity derivatives manager at Newedge Brokerage in Tokyo. "We have already seen a big rebound in US crude of about $25 a barrel since the low they touched in October."
The spread between Brent and US crude will remain at the current level of about $15 for the rest of the year on steady demand for grades linked to the European benchmark even as output improves in the North Sea and Libya, he said.
Reuters