Oil prices moved higher Tuesday as equity markets continued to surge in the wake of strong earnings reports while the dollar weakened.
The price of a barrel of West Texas Intermediate rose $1.13 to $97.57 a barrel after having earlier touched $97.82, the highest level since September 17.
Brent oil futures in London settled 88 cents higher at $114.36 a barrel.
The rise in oil prices and other so-called risk assets comes as the Dow Jones Industrial Average came within striking range of the record set in October 2007 before the economic crisis.
"We're getting so close to the all-time highs, they are targets now," said Bob Yawger of Mizuho Securities.
"The earnings have been better than anticipated and the situation of US Fed policy, cheap money and low interest rates could be in place for quite some time," Yawger said.
Oil and stock markets shrugged off another sharp decline in the US consumer confidence index Tuesday, after much more positive data released Monday showing strong growth in durable manufactured goods orders in December.
"Despite the softer confidence data for the US ... the macroeconomic backdrop remains favorable with equities near multi-year highs and the euro at $1.35 as we head to the first day of the Fed meeting," said Sucden analyst Jack Pollard.
The European single currency spiked as high as $1.3496 following the weak US consumer confidence data.
The struggling greenback makes dollar-priced crude cheaper for buyers using stronger currencies.
The market had its eye out for the conclusion Wednesday of the Federal Reserve's policy meeting, which could hint at how long the Fed intends to continue with its aggressive quantitative easing (QE) bond-buying program.
"The Fed has been the major reason oil is trading where it is because of the massive amounts of QE and bond buying that has supported the economy and made oil prices what they are," said Phil Flynn, analyst with the Price Futures Group.
The Fed's "statement will be key as it is apparent that within the walls of the Fed there is a growing reluctance to promise QE forever."