Brent crude rose above $113 on Monday, gaining for a third straight day on hopes of steady oil demand growth as Europe inches closer to contain the region's debt crisis with Greece agreeing to form a coalition government.
Greece's politicians said on Sunday they would form a unity government to approve a euro zone bailout. Gold, base metals and stock futures rose, while the euro held steady, as fears eased of the country facing an imminent default. Oil got additional support with winter demand for heating setting in.
"For oil, on the fundamental side, we are seeing an improvement with winter demand setting in," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo.
"Overall market sentiment has also improved as worries about Greece's political uncertainty ease somewhat."
Brent crude gained $1.12 a barrel to $113.09 by 0310 GMT. It settled $1.14 higher on Friday, above its 100-day moving average of $111.13, rising for a second consecutive week.
US crude traded 44 cents higher at $94.70 a barrel. The contract increased 1 percent last week, posting a fifth straight weekly gain.
US crude prices would rise towards $100 a barrel if they break past $95 due to supporting factors such as winter demand, Emori said. The benchmark may rise close to $105 towards the end of the year, he said.
Investors are also watching the unfolding bankruptcy of MF Global . CME Group said it was changing its margin requirements for customers of the collapsed brokerage, cutting the size of any margin calls when positions are transferred to another brokerage.
Separately, IntercontinentalExchange Inc, which operates the London-based ICE Futures Europe, said in a statement that ICE Futures US is temporarily lowering the initial margin rate for all speculative accounts to a level equal to the maintenance margin rate for all contracts.
Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed on a new coalition government.
Discussion on who would lead the new government would continue on Monday, the office of the Greek president said, after the European Union gave Greece 24 hours to show how it will enact its 130 billion euro emergency funding package.
Crude benchmarks are finding support on concerns of supply disruptions from major producers in the Middle East and North Africa as winter demand sets in.
Qatar's prime minister called for Arab states to meet next Saturday to weigh Syria's failure to implement a deal struck with the Arab League to end bloodshed that was touched off by the popular uprising against President Bashar al-Assad.
Syrian forces shot dead at least 13 civilians on Sunday in a continued military assault on the restive city of Homs and in attacks on pro-democracy demonstrations that erupted after prayers marking the main Muslim feast.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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