West Texas Intermediate light sweet crude oil for November delivery was popping $3.64 to $83.88 a barrel on the reports, and the December Brent crude contract was up $2.49 to $104.99.
"I would characterize oil's gains today as fragile," says Kingsview Financial trader Mathew Zeman.
"We could fall like a rock if there is any sign that this big bailout bonanza might not happen," adds PFGBest's senior energy analyst Phil Flynn.Meanwhile, Citi futures perspective analyst Tim Evans doesn't think it will take emphatically bearish news to bring the market back "down to earth." "A bit of fresh European dithering over what to do with Greek debt or a sobering Thursday gross domestic product report would be enough to do it," he said. Although weak Department of Energy inventory data for last week could impact oil market sentiment, Evans thinks that the drivers for the day-ahead will more likely be macroeconomic in nature, given the recent history of oil prices chasing after the latest swing in the S&P 500. "Today is a fresh round of 'risk on' trade, but investors should stop and think , or they're going to find themselves with plenty of risk -- but not in a good way," says Evans. A working plan among European officials to calm the eurozone's debt crisis buoyed investor confidence on Tuesday, with the markets looking past a weak U.S. consumer confidence report. Instead they focused on news that officials may be discussing levering up the eurozone rescue fund -- the European Financial Stability Facility -- by allowing it to borrow funds from the European Central Bank. "It's indeed nice to see some leadership," says Zeman. "However, we have seen multiple steps taken before and have seen plenty of tough rhetoric -- and thus far the problem still seems out of control." Borrowing costs for Portugal, Italy, Greece and Spain continue to spiral out of control and show potential for further worsening.