The price of oil rose above $94 a barrel Monday after European nations agreed on a bailout for Cyprus that saves the country from a financial collapse that would have threatened the euro currency bloc.
By early afternoon in Europe, benchmark crude for May delivery was up 77 cents to $94.48 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.26, or 1.4 percent, on Friday.
Cyprus secured 10 billion euros ($13 billion) of rescue loans early Monday, just hours before a deadline set by the European Central Bank. The bank had threatened to halt emergency assistance to the country's banks if no agreement was reached by Tuesday.
The deal requires the Mediterranean island nation to shut down its second-largest bank. All bond holders and people with more than 100,000 euros in their bank accounts will face significant losses. The action is being taken to raise 5.8 billion euros that Cyprus must provide to supplement the rescue loan.
"The relief at the fact that Cyprus will not suffer an uncontrolled bankruptcy and have to leave the eurozone may prompt financial investors to increase their long positions in crude oil," said a report from analysts at Commerzbank in Frankfurt.
The development comes on top of optimistic expectations for the U.S. economy. Mitul Kotecha of Credit Agricole CIB in Hong Kong said U.S. durable goods orders are expected "to record an impressive gain in February" when the data is released Tuesday. He also said in a market commentary that he expects to see fourth-quarter GDP revised sharply higher.
Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 50 cents to $108.16 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline gained 2.15 cents to $3.0727 a gallon.
— Heating oil rose 1.7 cents to $2.9898 a gallon.
— Natural gas added 5.6 cents to $3.983 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.