New York's main contract, West Texas Intermediate crude for delivery in February, gained 43 cents to USD 101.14 in morning trade. Brent North Sea crude for March delivery was up 26 cents to USD 111.79. However, Phillip Futures said in a commentary that "concerns about Europe's economy after last week's credit downgrade limited gains".
The euro was trading at USD 1.2777 against the US dollar in early Asian trade from USD 1.2737 in New York late Tuesday. A weaker greenback makes dollar-priced crude more attractive to traders using other currencies, boosting demand and pushing prices up.
Meanwhile, official data yesterday showed China's economy growing 8.9 per cent in the last quarter of 2011, higher than analyst expectations of 8.6 per cent although it was lower than figures for the previous three months. In the US, sentiment was also boosted by the Federal Reserve's Empire State index of manufacturing activity in New York, which showed a pick-up in January that exceeded expectations.
The United States is the world's largest oil consumer while China is the global leader in energy consumption. Traders were also heartened by the ZEW think tank's expectations index, which showed German investor confidence rose sharply in recent weeks and suggested Europe's top economy remains resilient to the eurozone crisis.