LONDON: Oil prices rose on Monday, in line with equity markets and on improved sentiment after Cyprus and its international creditors struck a bailout deal, averting collapse of the eurozone country's banking system.
Brent North Sea crude for delivery in May increased 69 cents to $108.35 a barrel in London midday deals.
New York's main contract, light sweet crude for May, added 45 cents to $94.16 a barrel.
"The oil market is reacting positively to news that Cyprus has reached a deal," said analyst Victor Shum at IHS Purvin and Gertz.
"There is now more clarity to the events in Cyprus," Singapore-based Shum told AFP.
The European Union, European Central Bank and International Monetary Fund struck a last-minute deal with Cyprus in the early hours of Monday that qualifies the island for a much-needed rescue package to help it service its debt.
The agreement involves breaking up the island's second largest lender Laiki (Popular Bank), while deposits above 100,000 euros ($130,000) with the Bank of Cyprus, the island's main lender, will face big losses.
Leaders had been under pressure to reach a deal after the ECB warned it would cut off funding to the island's banks if nothing had been done by Monday, which would have led to their collapse and likely forced Cyprus out of the eurozone.
Elsewhere, OPEC's largest oil producing member Saudi Arabia said that crude priced around $100 a barrel was "reasonable."
"In 1997, I thought 20 dollars was reasonable. In 2006, I thought 27 dollars was reasonable," Saudi Oil Minister Ali al-Naimi told reporters Monday in Kuwait City on the sidelines of a Gulf oil conference.
"Now, it is around $100 ... and I say again 'it is reasonable'" -- despite some market observers noting that the current level of energy prices was putting a strain on global economic recovery.
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