The price of oil rose above $103 a barrel Tuesday on persisting jitters over the situation in Gaza, the standoff over the shooting down of Malaysian Airlines Flight 17 in Ukraine and expectations of a fall in U.S. crude inventories.
By early afternoon in Europe, U.S. benchmark crude for September delivery was up 15 cents to $103.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 91 cents on Monday.
Brent crude for September delivery, a benchmark for international oils, was up 43 cents to $108.11 on the ICE Futures exchange in London.
Israeli airstrikes hit a wide range of targets across the Gaza Strip on Tuesday, as U.N. chief Ban Ki-moon and U.S. Secretary of State John Kerry met in Cairo to launch the highest-level push yet to end two weeks of Israel-Hamas fighting.
The war has added to the risk of instability in the oil-rich Middle East just as tensions have intensified between the West and Russia, a major oil and gas producer, over the Ukraine crisis.
European leaders are considering tougher sanctions against Russia for its backing of separatists accused of shooting down the Malaysia Airlines jet plane in Ukraine last week. The European Union's foreign ministers were meeting to discuss their next steps.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending July 18 is expected to show a draw of 2.6 million barrels in crude oil stocks and a build of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Financial.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration - the market benchmark - will be out on Wednesday.
In other Nymex trading:
- Wholesale gasoline rose 1.99 cents to $2.8831 a gallon.
- Heating oil gained 1.05 cents to $2.8816 a gallon.
- Natural gas was down 4.7 cents at $3.802 per 1,000 cubic feet.