But prices have come down from intra-day highs as market participants sell out of bullish positions after the European Central Bank (ECB) announced it would cut its main interest rate.
The ECB move followed an unexpected interest rate cut by China's central bank earlier in the day.
"You are getting a very strong 'sell the fact' move off these global rate moves this morning," said Mike Guido, managing director of hedge fund sales and energy markets, at Macquarie in New York.
"On the Statoil side, many expect the government to step in over the weekend and do not want to be too long if the government intervention is realized," he added.
Brent crude rose by 32 cents to $100.09 a barrel by 1405 GMT after hitting a high of $102.34 a barrel.
U.S. crude futures fell by 88 cents to $88.78 a barrel after rising by over $1 earlier in the day. A report showing U.S. jobless claims fell last week contributed to the overall sell-off.
The ECB will reduce its refinancing rate to a record low of 0.75 per cent and its deposit rate to zero to help tackle the euro zone crisis, which threatens to push the bloc's deteriorating economy back into recession.
"The non-farm payroll data from the U.S. coming out tomorrow will have a greater effect on oil than the ECB rate cut," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas in London.
"Because if the Feb decides to inject more dollars into the market, then oil will rise. The Fed will base future stimulus action on Europe and labour data, so if it's bad then a QE3 will come sooner."
Norwegian oil major Statoil said it would start shutting down production at its fields from July 9 and the shortfall would amount to 1.2 million barrels per day of oil equivalent as some 6,500 workers will be locked out of their work places.
The dispute between the industry and the unions over pensions has so far reduced production from Norway, the world's eighth largest oil exporter, by around 13 per cent.
A lockout means a complete shutdown of Norwegian oil and gas production, virtually guaranteeing government intervention and an end to the strike, which is now in its 12th day.
"The likelihood is that the strike will end sooner than expected. Prices rose in a knee-jerk reaction," said Carsten Fritsch, analyst at Commerzbank.
"We need to keep in mind that this is exactly what the unions were trying to avoid as it should force intervention from the government to force the workers back to work," Olivier Jakob at Petromatrix consultancy, wrote in an oil note.
Adding to global oil supply concerns, Iran's daily oil exports in July could fall below half the average shipped in 2011 before tough new Western sanctions stemmed the flow.
Japan and South Korea, among Iran's top oil buyers, have halted all Iranian imports this month due to sanctions imposed by Brussels on Sunday that aim to cut Iran's oil revenues and force Tehran to curb its disputed nuclear programme.
China's central bank cut interest rates a month after its last reduction as it tries to bolster slowing growth in the world's second-largest economy and crude oil importer.
"The market is not sure what to do with the news. It is positive news that China is easing its monetary policy, but there are worries that the slowdown might be worse than originally anticipated," James Zhang, an analyst at Standard Bank, said.
"The market is undecided but more inclined to take it as positive."
New data is expected on Friday and is likely to show that China's economic growth probably slowed further in the second quarter to 7.6 percent, its worst performance since the 2008/09 financial crisis.
"The cut in rates came sooner than we expected. We were looking for a cut in reserves requirement ratios first, to be followed by a rate cut," said Tchilinguirian at BNP Paribas in London.
A rate cut first "signals a more aggressive stance to defend economic growth, which has shown clear signs of slowing down in Q1", he said.
Copyright @Thomson Reuters 2012