Oil rose past $84 on Monday after the European Union approved a rescue for Ireland and outlined a permanent system to resolve the euro zone's debt crisis, providing some confidence that energy demand growth will remain resilient next year.

US crude for January rose as much 0.8 per cent to $84.46 a barrel, nearing Friday's peak of $84.53, the highest intraday price since Nov. 16, and was up 52 cents at $84.28 by  0209 GMT. Prices reached a two-year high of $88.63 on Nov. 11.

ICE Brent for January rose 57 cents to $86.15, returning to positive territory as the dollar pared gains.

Finance ministers from the 16-nation euro zone, anxious to prevent market contagion engulfing Portugal and Spain, unanimously endorsed an emergency loan package of 85 billion euros ($115 billion) to help Dublin cover bad bank debts and  bridge a huge budget deficit.

'The southern European sovereign debt crisis would have to  take a severe turn for the worse to derail positive commodity  price trends that are finding strong support from improving  fundamentals and positive market sentiment towards growth  assets' following the second wave of US expansionary  monetary policy, Barclays Capital analysts, including Kevin  Norrish, said in a report on Monday.

Still, some market participants were wary that the package for Ireland would fail to end Europe's credit problems, citing  the Greek crisis as a precedent of how markets intially  reacted positively to a bailout and then slumped.

'It is just a relief rally, but there are still so many structural problems that people are already targeting other dominoes like Portugal and Spain,' said Michelle Kwek, an  analyst at Informa Global Markets in Singapore.

Currency and bond traders doubted the deal was enough to   prevent fiscally pressured Portugal and Spain from being next   in line to suffer a debt crisis. – Reuters