U.S. crude prices gained for the fifth straight session on Tuesday as major oil producers raised their forecasts for world oil demand.
In its World Oil Outlook report released on Tuesday, the Organization of Petroleum Exporting Countries (OPEC), raised its forecast of world oil demand by 1.9 million barrels a day, to 92.9 million barrels by the year of 2015.
Oil also got a lift after Italian Prime Minister Silvio Berlusconi promised to resign amid Italy debt woes. Investors were happy to hear that Berlusconi promised to step down as soon as the parliament passed urgent budget reforms, which is seen as a positive step to remove any hurdles for Italy's economic reform aiming at tackling its debt problems.
Meanwhile, concerns on possible tensions in the Middle East region once again pushed oil prices higher after the International Atomic Energy Agency said in a report that Iran carried out "work on the development of an indigenous design of a nuclear weapon including the testing of components."
Light, sweet crude for Dec. delivery rose 1.28 dollars, or 1.3 percent to settle at 96.80 dollars a barrel on the New York Mercantile Exchange, the highest closing level for a most-active contract since July 28.