Brent crude oil rose to around $106 per barrel on Friday, buoyed by a European Central Bank pledge to protect the euro zone and hopes for a fresh economic stimulus in the United States.
European Central Bank President Mario Draghi said on Thursday the ECB would do whatever it took to protect the currency bloc from collapse, a remark analysts said could signal a resumption of an ECB sovereign bond-buying scheme.
Flagging U.S. economic growth has encouraged many economists to predict that the Federal Reserve will also launch a new round of quantitative easing (QE), buying its own debt to pump money into the financial system.
Such a move would also probably help depress the dollar, which tends to move inversely to commodities such as oil.
"Financial markets see a benign mix of gently rising risk appetite as worries over an imminent euro zone disaster ease and prospects for another U.S. stimulus increase," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.
"Draghi's comments are a major positive for oil."
Brent crude futures for September were up 30 cents at $105.56 per barrel by 05.15 GMT after rising to a high of $106.41, up $115. U.S. light crude futures were up 5 cents at $89.44 per barrel.
Despite the rises, both Brent and U.S. crude remained on course for their biggest weekly drop in a month.
The gain in oil on Friday reflected generally stronger financial markets, with rises in stock markets in Europe .FTEU3 and Asia .HK .T.
While the short-term risk surrounding a euro zone break-up may have eased, analysts said Europe must use the time to work out an effective framework for sharing credit risk.
Many of the fundamental problems faced by the weaker euro zone economies have yet to be addressed and some key pledges for reform have not been met.
Despite widespread hopes for a comprehensive solution to the euro zone crisis, many investors and traders remained skeptical.
"If they don't use this time to set up a policy framework that would see the likes of Germany play a bigger role in assuming credit risk, then the risk factor is going to be back on," said Ric Spooner, chief market analyst at CMC Markets.
"The credibility of the ECB will be shredded if there is no serious policy action to follow Draghi's comments yesterday."
Olivier Jakob, analyst at energy market consultancy Petromatrix in Zug, Switzerland said Draghi's comments were vague enough to interpreted in several ways, either "very little or imply that the ECB would embark on some disguised direct buying of bonds from southern Europe".
"The problem today, as before, is that European words need to be backed up by European action and while we have a long list for the former we still lack a lot for the later."
Financial markets awaited the release at 1230 GMT of U.S. second-quarter gross domestic product figures, which economists predicted would show a rise of around 1.5 percent year-on-year, after rising 1.9 percent in the first three months of the year.
That would mark the weakest pace of growth since the second quarter of 2011 and would be likely to stimulate more calls for QE and other measures to stimulate the world's biggest economy.
While U.S. unemployment benefit claims have fallen to near a four-year low, analysts say a fresh stimulus may be needed to improve growth rates, broadly boosting appetite for commodities.
"Today we're likely to see GDP numbers at around 1.5 percent -- not a technical recession, but it's not exactly going to be a boost to confidence," Spooner said. "You need to see growth over 2.5 percent for us to see those unemployment numbers come down (further)."