Global oil prices have soared to new four-month highs, as speculation intensified that the US Federal Reserve is about to announce more quantitative easing to stimulate the flagging economy.
The market also surged higher on Thursday as traders eyed simmering geopolitical tensions in the crude-rich Middle East.
In afternoon trade, Brent North Sea crude for delivery in October jumped to $US117.48 per barrel - reaching a high point last seen on May 3.
New York's main contract, West Texas Intermediate (WTI) or light sweet crude for October, leapt to $US98.58. That level was last witnessed on May 4.
Later on Thursday, the Fed will unveil the outcome of its latest monetary policy meeting, with speculation mounting over economic stimulus measures or quantitative easing (QE) in the world's biggest oil-consuming nation.
"Crude oil prices continue to remain well supported on concerns about unrest in the Middle East as well as the increased speculation about QE ahead of this evening's Fed meeting," said CMC Markets analyst Michael Hewson.
The US central bank's Federal Open Market Committee (FOMC) is widely expected to find the economic outlook too weak to refrain from action to stimulate growth.
"Our guess is that the FOMC will announce some measure of monetary stimulus today, especially as the most recent US jobs report featured an increase of 96,000 in non-farm payroll employment, which fell short of market expectations," added VTB Capital economist Neil MacKinnon.
Oil also won support as the euro held close to a four-month peak above $US1.29. A weaker greenback makes dollar-priced oil cheaper for buyers using stronger currencies, boosting demand.
Brent oil prices later stood at $US116.70, up 74 cents from Wednesday's closing level. The WTI contract was 92 cents higher at $US97.93.
Crude futures also gained ground on the back of geopolitical tensions after the killing of the US ambassador to Libya.
Analysts said the death of Chris Stevens, from smoke inhalation after becoming trapped in the US consulate in Benghazi during an attack, sparked renewed concerns over geopolitical risks in the crude-producing region.
Crude futures had also rebounded on Wednesday after Germany's top court approved the eurozone's bailout fund and fiscal pact, sending the euro racing to a four-month peak at $US1.2937.
However signs of weaker demand for energy in the United States put a cap on gains, analysts said.
The US government's Energy Information Administration said on Wednesday that the country's crude oil stockpiles rose by two million barrels in the week ending September 7, confounding expectations for a sharp decline.
