Oil prices have rebounded as the dollar sank against the euro on news of a draft euro zone summit deal to provide loans on improved terms to debt-ridden members like Greece, Ireland and Portugal.
New York's main contract, West Texas Intermediate light, sweet crude for delivery in September, rallied $1.13 to $99.53 a barrel, after briefly breaching the psychological level of $100 for the first time since 10 June.
Brent North Sea crude for September added 48 cents to $118.63.
European equities surged and the euro topped $1.44 as the draft deal showed the euro zone would provide loans with lower interest rates and longer maturities to countries in financial trouble.
Oil prices had risen yesterday as news of declining US crude inventories signalled strengthening energy demand in the world's largest economy.
US crude oil inventories fell 3.7m barrels in the week ending 15 July, according to a weekly report from the US Department of Energy.
The decline was steeper than market expectations for a drop of 1.4m barrels.
Prices also advanced on optimism politicians in Washington would reach a deal to raise the US federal government's debt ceiling and avert a potentially catastrophic default, analysts said.
