Brent crude oil rose towards $106 per barrel on Friday, buoyed by hopes for a fresh economic stimulus in the United States after confirmation of a slowdown in U.S. economic growth.
A European Central Bank pledge to protect the euro zone also supported financial markets, helping steady the euro.
U.S. economic growth slowed as expected in the second quarter, with an annualised gain of 1.5 percent, potentially pushing the Federal Reserve closer to pumping more money into the economy.
Flagging U.S. growth has encouraged economists to predict that the Federal Reserve will buy its own debt to inject funds into the financial system.
Such a move would also probably depress the dollar, which tends to move inversely to commodities such as oil.
"Financial markets see a benign mix of gently rising risk appetite as worries over an imminent euro zone disaster ease and prospects for another U.S. stimulus increase," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.
Brent crude futures for September were up 30 cents at $105.56 per barrel by 1250 GMT after rising to a high of $106.41. U.S. light crude futures were flat at $89.39.
Despite the rises, both Brent and U.S. crude remained on course for their biggest weekly drop in a month.
The gain in oil on Friday reflected generally stronger financial markets, with rises in stock markets in Europe and Asia .
While the short-term risk surrounding a euro zone break-up may have eased, analysts said Europe must use the time to work out an effective framework for sharing credit risk.
European Central Bank President Mario Draghi said on Thursday the ECB would do whatever it took to protect the euro from collapse, a remark analysts said could signal a resumption of an ECB sovereign bond-buying scheme.
Many of the fundamental problems faced by the weaker euro zone economies have yet to be addressed and some key pledges for reform have not been met.
Despite widespread hopes for a comprehensive solution to the euro zone crisis, many investors and traders remained sceptical.
Olivier Jakob, analyst at energy market consultancy Petromatrix in Zug, Switzerland said Draghi's comments were vague enough to interpreted in several ways, either "very little or imply that the ECB would embark on some disguised direct buying of bonds from southern Europe".
"The problem today, as before, is that European words need to be backed up by European action and while we have a long list for the former we still lack a lot for the latter." (Additional reporting by Luke Pachymuthu in Singapore; editing by Keiron Henderson)