Brent crude oil jumped 1 percent to top $118 in light trade on Friday, buoyed by Europe's latest agreement to bail out Greece and by spread buying which widened the gap between London and US crude.
US products, including heating oil and gasoline, rose alongside Brent, helping push US crude to six-week highs, though gains were tempered by uncertainty over talks to avert an unprecedented US default.
The spread buying was a reversal from the selling seen late the previous session, when Brent fell after an aggressive sell off in gasoline and spreads fed by US demand concerns, market players said.
"A lot of what we are seeing today is spread related. From the WTI perspective you will see that Brent and US products are strong and that is pulling US crude up," said Tim Evans, analyst, Citi Futures Perspective, New York
The Brent futures contract for September rose $1.16 to settle at $118.67 a barrel. US crude rose for a fourth straight session, settling up 74 cents at $99.87 a barrel, its highest close in six weeks.
As during Thursday's session, oil briefly rose above $100 but failed to retain those gains.
For the week, US crude futures rose $2.63, a fourth straight week of gains, while Brent rose $1.14, rebounding from the previous week's losses.
Trading volumes were thin. At 2.55 pm EDT, US crude traded around 401,000 contracts, almost 40 percent below the 30-day average, while Brent volume hit 219,000 lots, down almost 60 percent from the 30-day average.
With markets watching the debt ceiling debates, President Barack Obama said any deficit-cutting deal must be crafted to avoid denting economic growth, warning another recession would be "the worst thing" for US fiscal health.
"The US debt ceiling crisis hasn't been solved and there has been mixed economic data, so that might not be enough to keep crude above $100," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Analysts and traders said the preliminary solution to the eurozone debt crisis presented in Brussels on Thursday was still providing some support for Brent.
The oil market shrugged off weakness on Wall Street and a stronger dollar, which can pressure curde prices.
The Dow fell on Friday after poor results from Caterpiller and Microsoft, while the euro slipped against the dollar as investors focused on how the second rescue package for Greece and measures to stop the European debt crisis from spreading will be implemented.
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