Crude oil prices gained in European trade on Wednesday, following hopes that European leaders will approve aggressive plans for tackling the region's debt crisis at Friday's European Union summit.
The sentiment received a boost after Financial Times reported late on Tuesday that EU officials are discussing plans to expand powers of the European Rescue Fund to tackle regional debt crises.
According to the report, the plan involves allowing the region’s existing 440 billion euro fund to continue running even after the introduction of the new 500 billion euro facility, known as the European Stability Mechanism, which is to come into force in mid-2012.
Light sweet crude for January delivery gained 59 cents to $100.87 a barrel in electronic trading on the New York Mercantile Exchange during European trading hours.
Meanwhile, fears that growing tensions between Iran and Western powers may threaten crude supplies from the Middle East also added gains.
The U.S. Energy Department’s Energy Information Administration is due to submit its weekly supply data later on Wednesday. Any indications that demand is spiking above expectations will add weight to a higher price for crude.