Hopes that a Greek debt deal and European budget agreement would help support stronger economic growth have also contributed towards these rising prices.
There are concerns about oil supplies from OPEC's second-largest producer, Iran, as the United States considers more sanctions on top of a European embargo on Iranian. These sanctions hope to pressure Tehran to halt its nuclear programme.
Potential supply worries also arose when South Sudan made the decision to keep its production shut in a transit fee dispute with former civil war foe Sudan.
Reuters have reported that ICE Brent crude for March was up 90 cents at $111.65 a barrel by 0855 GMT, on course to rise around 3.5 percent in January. U.S. March crude jumped $1.11 to a high of $99.89 before easing back slightly to trade at $99.85.
"Iran will make sure we see more upside than downside," said Jeremy Friesen, a commodity strategist at Societe Generale.
Support from across-the-board rises in Asian and European stock markets after Greek Prime Minister Lucas Papademos raised hopes that a deal would be reached this week. Such a deal could help avoid a potentially chaotic debt default.
The Finance Minister of Luxembourg, Luc Frieden, suggested Greece and its private creditors were close to a debt restructuring deal.
The dollar fell 0.3 percent against a basket of major currencies, remaining under pressure after the U.S. Federal Reserve said last week it was likely to keep interest rates near zero at least until late 2014.
Dollar-denominated oil becomes cheaper to holders of other currencies when the United States dollar weakens.
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