(Reuters) - Oil rose above $110 a barrel on Thursday after European leaders struck a deal with private holders of Greek debt, easing concerns that economic weakness could spread and curb energy demand.
Euro zone leaders struck a deal with private banks and insurers on Thursday for them to accept a 50 percent loss on their Greek government bonds under a plan to lower Greece's debt burden and try to contain the euro zone crisis.
At 1000 GMT (6 a.m. EDT), Brent crude was up $1.82 at $110.73 a barrel, after touching a high of $110.96 earlier. U.S. crude gained $1.97 to $92.17 a barrel, down from an intraday high of $92.43.
"Oil prices have made slight gains in response to the decisions made at the EU summit," said Carsten Fritsch, analyst at Commerzbank. "There's a risk-on mood in the market, despite yesterday's rather bearish inventory report."
Crude prices had fallen on Wednesday, with U.S. oil sliding 3 percent, because of a rise in U.S. inventories and on caution about Europe's ability to agree on a plan to address the debt crisis.
World stocks and the euro rose to their highest levels in nearly two months and, as concerns of a near-term default eased, the cost of insuring Greek debt against default also fell.
"The macro event and the financial markets are leading and oil futures are reacting even though the crude inventories in the U.S. have increased substantially," said Victor Shum of Purvin & Gertz.
U.S. crude stockpiles rose 4.74 million barrels, the U.S. government's Energy Information Administration said on Wednesday, more than analysts expected.
Still, other figures from the U.S. provided a more positive picture of prospects for the world's largest economy and oil consumer.
U.S. durable goods data on Wednesday indicated the economy was heading into the fourth quarter with solid momentum with demand for a range of long-lasting U.S.-made goods rising at the fastest pace in six months in September.
And in China, the second-largest oil consumer, there are expectations the government may loosen a tight liquidity policy in the fourth quarter as growth slows, while hopes are running high that inflation has peaked.
(Reporting by Seng Li Peng and Alex Lawler; editing by Keiron Henderson)
