SINGAPORE: Brent futures held above $112 on Friday as plans for economic reform in Spain eased investor worries about Europe's fiscal crisis and revived hopes of a recovery in oil demand growth, with worries about supplies from the Middle East also providing support.
Asian shares, base metals and gold all gained as Spain announced a budget for 2013 based mostly on spending cuts that could be an effort to pre-empt the likely conditions of an international bailout.
But some see Spain as just one of many obstacles to be overcome by policymakers with the overall outlook for the region still bleak, possibly limiting further gains in oil.
Brent had gained 47 cents to $112.48 a barrel by 0247 GMT, after settling $1.97 higher. US crude rose 45 cents to $92.30, following an increase of $1.87 in the previous session.
"The euro zone crisis may have overcome one hurdle - Spain - but the overall situation is far from having a long term solution," said Victor Shum, managing director for downstream energy consulting at IHS Purvin & Gertz.
"But the supply risks in the Middle East and geopolitical worries are giving oil added support."
Israeli Prime Minister Benjamin Netanyahu drew a "red line" for Iran's nuclear program on Thursday despite a US refusal to set an ultimatum, saying Tehran will be on the brink of developing a nuclear weapon in less than a year.
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