Oil prices rose today after German business morale jumped at its fastest pace for more than two years in February, according to a Munich-based think tank, indicating a good recovery for Europe’s largest economy.

Brent crude rose to $114.25 a barrel, while US crude rose by ten cents to $92.94, reported Reuters.

Oil prices also received a boost from escalating tensions between the West and Iran, prior to the start of fresh negotiations slated for next week.

The UN nuclear watchdog noted that the country has started installing advanced centrifuges at its main uranium enrichment plant.

The discussion on whether the US Federal Reserve should constrict its fiscal policy was dragged even on Thursday.

Economic data, which is indicating towards a slow recovery, is expected to support the case for the Fed to continue with its bond-buying programme.

Investors are likely to keep a close eye on the US budget debate, as President Barack Obama requested a meeting with Republican leaders on Thursday to resume talks.

If the White House and Republicans fail to reach an agreement on how to deal with the budget crisis, the spending cuts proposed across the US Government, which will come into effect from 1 March 2013, is expected to hurt its economy and lead to job losses.

On Thursday, the US oil data released were mostly negative, while the American Petroleum Institute said that oil demand had decreased by nearly two percent in January, from the same period in 2012.

The Energy Information Administration said that crude oil stockpiles increased more than expected to 4.14 million barrels last week, the highest level since July 2012.

Image: Oil prices got support from escalating tensions between the West and Iran. Photo courtesy of freedigitalphotos.net / John Kasawa.