Oil prices edged higher in afternoon London trade, remaining well supported above $99 by heightened tensions in the Middle East and the continued flow of fund money into commodities.
Fund money has poured into commodities recently as market players look to hedge against the weakness prevalent in equity and bond markets during the current financial turmoil. While the inflow of financial players has boosted prices, it has left the complex vulnerable to corrections on profit-taking.
Rising tensions in the Middle East have leant support to oil's move back up to around the $100 mark, with Turkey's move into northern Iraq and warnings by Iran against further sanctions increasing fears over the security of supplies.
"Several factors are impacting the price gains at the moment, not least the Turkish incursion into northern Iraq and the fact they look like extending that operation," said Bank of Ireland analyst Paul Harris.
"Investors and speculators are also looking at the commodity suite as a whole, and there's a belief there's more upside potential in the market."
At 1.13pm, New York's WTI crude for April delivery was up 25 cents to $99.06 per barrel. In London, Brent crude for April delivery was up 41 cents at $97.42 per barrel.
Last week, the International Atomic Energy Agency reported it was still unsatisfied with its investigation into Iran's past nuclear weapons research, despite co-operation in other areas from the Islamic state.
Iranian President Mahmoud Ahmadinejad has threatened "decisive reciprocal measures" against any country who supports increasing sanctions against the Islamic state.
The UN Security Council with Germany is preparing a third tougher round of sanctions in response to the IAEA's report, increasing fears Iran could use oil supplies as a political weapon.
Turkey's military move into Iraq has also stoked fears over supplies, with fighting in the key energy corridor heightening concerns that Kurdish guerillas could target pipelines in the area.