LONDON: Brent crude oil rose to around $106 per barrel on Friday, buoyed by a European Central Bank pledge to protect the euro zone and hopes for a fresh economic stimulus in the United States.
European Central Bank President Mario Draghi said on Thursday the ECB would do whatever it took to protect the currency bloc from collapse, a remark analysts said could signal a resumption of an ECB sovereign bond-buying scheme.
Flagging US economic growth has encouraged many economists to predict that the Federal Reserve will also launch a new round of quantitative easing (QE), buying its own debt to pump money into the financial system.
Such a move would also probably help depress the dollar, which tends to move inversely to commodities such as oil.
"Financial markets see a benign mix of gently rising risk appetite as worries over an imminent euro zone disaster ease and prospects for another US stimulus increase," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.
"Draghi's comments are a major positive for oil." Brent crude futures for September were up 30 cents at $105.56 per barrel by 0915 GMT after rising to a high of $106.41, up $115. US light crude futures were up 5 cents at $89.44 per barrel.
Despite the rises, both Brent and US crude remained on course for their biggest weekly drop in a month.
The gain in oil on Friday reflected generally stronger financial markets, with rises in stock markets in Europe
and Asia . While the short-term risk surrounding a euro zone break-up may have eased, analysts said Europe must use the time to work out an effective framework for sharing credit risk.
