Brent rises above $111

Brent crude oil futures gained as the euro rose against the dollar, surpassing $111 a barrel on Tuesday, for the fifth straight session of gains as investor optimism ahead of corporate earnings season lifted markets. The euro's resumption of its advance against the dollar, encouraged more risk taking in crude. A rally in US gasoline futures due to refinery problems in the US East Coast was also supportive, traders said.
Brent crude's 11 percent, five-day gain was the biggest since August 2009 and marks a sharp rebound from the eight-month low close below $100 just a week ago. Crude futures fell sharply earlier on worries over the health of Europe's economy as its top financial watchdog said the eurozone's sovereign debt crisis threatened global economic stability.
That retreat came ahead of a Slovak vote on changes to the eurozone's financial rescue fund. Earlier, European Central Bank President Jean-Claude Trichet issued the dramatic warning amid growing fears that Greece would default on its massive debt. By 2:40 p.m. EDT (1840 GMT), Brent crude for November delivery gained $1.92 at $110.87 a barrel, just below its session high of $111.15, the highest since Sept. 21, from the early low of $107.45.
US November crude settled at $85.81, rising 40 cents, after peaking at $86.64, having climbed from an early low of $83.97. Both Brent and US crude have broken above their 50-day averages. US crude also found support on rallying gasoline futures, whose front-month contract gained more than 2 percent due to refinery outages in the US East Coast, traders said.
The euro recovered against the dollar as investors awaited results of the Slovak vote, also lifting oil prices further. "The euro rallying and the US gasoline's rally have helped pushed oil prices up," said Mark Anderle, trader at TAX Energy in Dallas, Texas. World oil demand may be more robust that expected, as consumption in Asia and the Middle East is holding up and even with the slowdown in economic growth in the United States and Europe, said Fatih Birol, chief economist of the International Energy Agency.
Earlier, Opec, which pumps a third of the world's oil, cut its global oil demand growth forecast for a fourth consecutive month on Tuesday, citing the downturn in developed countries and efforts by China and India to curb fuel use. "The economic downturn is taking its toll on the world oil demand," the Organisation of the Petroleum Exporting Countries (Opec) said in its monthly oil market report.
"The decelerating US economy, high unemployment rate and feelings of uncertainty among consumers, has damped US oil demand. Similarly, debt problems in the eurozone are causing EU economies to lose some of their estimated growth this year." Opec cut its forecast of global oil demand growth this year by 180,000 barrels per day (bpd) to just 880,000 bpd. Next year it sees oil demand growing slightly faster - by 1.19 million bpd, down 70,000 bpd from its previous estimate in September.