Oil jumps as dollar slides against euro (AFP)

London (AFP)-world oil prices rallied Tuesday, as traders took their cue from the fading U.S. currency and stock market strengthened, but the gains were capped by caution over the Greek debt crisis.

New York's main contract, West Texas Intermediate for delivery in August, added 91 cents a barrel to $ 91.52.

North Sea Brent crude for August jumped $ 2.20 to $ 108.19 in late afternoon deals in London.

"Crude oil prices continued their upside momentum and climbed higher, supported by a weaker dollar and a recent rally in global equity markets," said analyst Myrto Sokou Sucden.

"However ... all eyes remain on Greek Parliament vote on Wednesday that clarify the current uncertain economic situation in Greece and then provide additional guidance to the economic stability of the euro area (s)."

The single European currency has risen against the dollar on Tuesday, as markets waited for decisive vote this week in Athens the Greek Government's latest austerity package.

In late London trading, the euro advanced to $ 1.4361, up from $ 1.4277 in New York late Monday.

A weaker dollar tends to boost dollar-priced raw materials become cheaper for buyers using stronger currencies. In turn, that stimulates demand and prices.

Greek lawmakers will vote on Wednesday and Thursday on major austerity plans that aim to unlock 12 billion euros (17 billion dollars) of European Union funds and the International Monetary Fund.

Dealers said the hope is that the Greek debt crisis is approaching resolution Finally, one way or another, although there might still be more twists before anything is done, leaving investors to cover their bets.

Investors know that the stakes are high, they said, as failure to pass the measures mean that Greece will default on its debt, with all that might mean for the euro area and the wider global economy.

A Greek default risks unleashing the infection in the rest of Europe that many fear could affect global financial stability — and the demand for energy.

Oil fell last week after the International Energy Agency has agreed to draw on emergency stocks to make for a Libyan lost supplies critical response from pushing OPEC Secretary General Abdullah Al-Badri.

"El-Badri called the IEA to stop the release of strategic reserves immediately as there is sufficient grounds for this measure in its point of view," said Commerzbank analyst.

"The harsh reaction of the OPEC Secretary General proposes that the IEA decision not been agreed with OPEC. This increases the risk that members of OPEC will react by reducing the supply of oil prices falls under too much pressure.

"Most OPEC members are dependent on rising oil prices due to higher fiscal spending," they added.

The IEA unexpectedly announced last Thursday that it would release 60 million barrels of crude oil from strategic oil reserves over the next month to curb the high prices.

The Paris-based body, which represents the 28 Nations that requires more oil, OPEC production asked prevent high prices damage the global recovery.

But the Organization of petroleum exporting countries (OPEC), whose 12 members Nations pump 40 per cent of the world's oil, has opted to maintain output levels at the beginning of this month.

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