Brent crude rose above $110 a barrel on Monday after European leaders made some progress over the weekend on a plan to fight the eurozone debt crisis, while manufacturing data from China also supported sentiment.
Investors are riding high on hopes that Wednesday's meeting of eurozone leaders to discuss their final decisions on the debt issue would yield even more positive results, although sharp differences remain over the size of losses private holders of Greek government bonds will have to accept.
"The results from the European Union meeting seemed quite positive," said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo. "People are hoping to see even more positive news on October 26."
Brent crude futures were up 72 cents at $110.28 a barrel at 0351 GMT, after a decline of 0.2 percent on Friday.
US crude rose 77 cents to $88.17 a barrel.
"But oil fundamentals have not changed," Emori said, adding that the market will continue to stay volatile on concern a recovery may stall.
China's vast manufacturing sector picked up moderately in October, snapping a three-month contraction and underscoring the resilience of the world's second-largest economy and top energy consumer, according to HSBC's China Flash Purchasing Managers' Index.
The PMI data could soothe persistent investor fears of an abrupt slowdown, or hard landing, in China's economy that could send an already fragile world economy into a recession.
Asian stocks rose on Monday and the euro gave back some of the gains it made last week, while traders waited for final details of a eurozone debt deal expected to be unveiled later this week.
The market also weighed in news of the death of Saudi Arabia's Crown Prince Sultan, with analysts saying it was not expected to affect the oil market.
Prince Sultan, who had been heir to the Saudi king since 2006 and defence and aviation minister since 1962, died of colon cancer in New York on Saturday.
"I do not think the there is any attitude change in Saudi Arabia," said Ken Hasegawa, a commodities derivatives manager with Newedge Brokerage in Tokyo. "There is no big impact on oil markets."
In Yemen, gunfire and shelling in the country's capital Sanaa killed two people on Sunday, medics said, two days after the United Nations issued a resolution condemning the violence and urging President Ali Abdullah Saleh to step down.