Brent crude oil rose to its highest level in a month, reaching above $111 and settling at $111.26 on Tuesday morning at 10:20 GMT.
The commodity has been supported by the weeklong outbreak of violence between Israelis and Palestinians in Gaza. Reuters reported that the death toll has risen above 100, including at least 27 children. As a result of the fighting, oil prices have risen for fear that the violence will spread to neighboring countries and cause supply interruptions.
Most of the world is pressuring the two sides to end the fighting and call a ceasefire, but so far no agreement has been reached. Secretary of State Hillary Clinton has traveled to the region in an attempt to persuade leaders that the escalation of these attacks will not benefit anyone. A peaceful resolution in the region would bring oil prices down.
Gains due to fighting were limited by concerns in Europe, where Greek finances are under scrutiny. EU finance ministers will meet on Tuesday to discuss how to dig the country out of a painful recession. In addition, Moody's has downgraded France's investment grade rating causing further concern for the future of the eurozone.
Promising data from the US has buoyed oil prices as well, as home re-sales rebounded and a survey of home builder sentiment showed renewed optimism in the struggling housing market. As the US moves closer to its January 1st ‘fiscal cliff' it seems lawmakers are moving toward a solution.
After last year's ‘debt ceiling' crisis, many worried that a compromise would not be reached in time to avoid a massive bundle of tax increases and spending cuts set to kick in January 1st. However, investors are hopeful as news out of the US is optimistic that the two parties will reach an agreement soon.
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