Crude oil advanced for a fourth day on signs that Europe and US will contain their debt crises, easing speculation demand for raw materials will suffer, Bloomberg reported.
Eurozone leaders announced €159bn further aid for Greece last night. In addition, Barack Obama's plans to raise the US debt ceiling to $14.3trn before the 2 August deadline may have also boosted prices.
The price of Nymex Crude stood at $117.81 per barrel this morning, according to BBC data, climbing steadily from a $116 dip last week.
Meanwhile, the International Energy Agency (IEA) announced last week it will issue no more emergency reserves, despite rising oil prices.
Last month, the international energy watchdog made the controversial move of injecting 60 million barrels of oil into the market to try and dampen escalating prices spurred by the Middle Eastern crisis.
The IEA has only intervened in the oil market twice before, once during the Gulf war and also in the aftermath of Hurricane Katrina.
Oil dropped sharply following the IEA move to increase supply last month, by 5% or $6 to $108, but rebounded within a week, and has now recovered to the $117 mark.
At the time, Tom Nelson, co-manager of the Guinness Global Energy fund branded the IEA move as setting a "dangerous precedent", unlikely to be repeated.
"I do not think it is likely," he told Investment Week. "Essentially this is a show of strength by the IEA, reminding OPEC they do not control the whole market."
The IEA announced last week it was "not seeking" to sell more barrels because its target of replacing the one million barrels of oil per day lost from Libya had now been achieved.
In addition, the IEA said excess supply was expected to be generated by the Organisation of Petroleum Exporting Countries (OPEC), with Saudi Arabia expected to raise output to 10 million barrels per day.
Some economists have branded the IEA as powerless to control oil prices.
Julian Jessop, chief international economist at Capital Economics, told CNBC yesterday: "The IEA's intervention has not been a game changer for oil prices and the big picture will still be determined by more fundamental forces."
Jessop expects Brent crude to fall back from $117 to $85 by the end of the year.
"This forecast is based on persistent sluggishness in demand, increased nervousness in financial markets over the fall-out from the debt crisis both in the euro-zone and the US, a stronger dollar, and, although the precise outcome and timing is obviously still uncertain, an end to the civil war in Libya."
