Oil gained today, lifted by expectations that inventories in the world's top consumer fell for a seventh week, while it was also supported by dollar weakness
By 0944 GMT, Brent crude futures were up 81 cents at $116.86 after reaching a high of $117.16 while US light crude futures added 84 cents to $96.77 after hitting a peak of $96.93.
An expected fall in U.S. stocks of oil are seen as keeping upward pressure on crude prices.
Inventories are likely to have fallen by 1.3 million barrels last week due to higher refinery utilisation and a slide in imports, a Reuters poll showed ahead of weekly reports.
"Estimates that there's been a drawdown in gasoline are giving prices a bit of a boost, but we are really range trading after the weakness we saw the previous session," said Tony Machacek, futures broker at Jefferies Bache.
In the second-largest oil consumer China, refined oil product stocks at the end of June increased nearly 1 million tonnes from a year earlier.
They were at a normal level, after fuel consumption slowed down since mid-April, a government report showed today
The dollar softened versus the euro and a basket of currencies today as the single currency regained some ground after losses in the previous session on worries that the euro zone debt crisis will worsen.
The White House said it was pursuing a last-ditch plan with Congress to raise the US debt ceiling and avert a default that could plunge global financial markets into chaos.
A weaker dollar makes oil and other commodities more affordable for holders of other currencies, and gold rose further after the 1 per cent rise overnight.
Brent is biased to fall to $110 per barrel as a bearish double-top is likely to be confirmed, while US oil will be neutral in $94.50-$97.90 per barrel, according to Reuters technical analyst Wang Tao.
Oil was also supported by expectations that the International Energy Agency (IEA) would not release emergency stocks for the second time so soon.
This was because there was no sign yet of the kind of shortage to mandate another dip into the West's emergency oil reserves when a 30-day deadline for assessing the impact of a first release expires at the end of this week, traders and analysts said.
For another IEA release to take place, it would have to be endorsed by all 28 members of the energy consumer body. Germany and Italy are likely to resist any plans for a second release for now, a French government source told Reuters last week.
Investors were also focusing on a decline in crude stockpiles in the US, where inventories are likely to have fallen by 1.3 million barrels last week due to higher refinery utilization and a slide in imports, a Reuters poll showed ahead of weekly reports.
Participants were also watching China, where refined oil product stocks at the end of June increased nearly 1 million tonnes from a year earlier and were at a normal level, after fuel consumption slowed down since mid-April, a government report showed today.
"China demand will have quite an impact on Brent as it buys a lot of Brent related crude oil. Chinese refiners usually need sweet crude from West Africa," said a North Asian trader.
Governments and banks in Europe struggled to reconcile competing proposals for a second bailout of Greece on Monday, three days before leaders meet to prevent the crisis from spreading through the region.
The euro zone summit scheduled for Thursday in Brussels is likely to agree on a rescue of Greece, supplementing a €110 billion bailout launched in May last year, a French government spokeswoman said.
But after three weeks of preparatory talks, it was unclear how a consensus could be reached for private owners of Greek government bonds - banks, insurers and other investors - to contribute by taking cuts in the face value of their holdings.
Reuters
