Oil climbed in New York, heading for the biggest weekly gain this year, as signs of an improving U.S. economy and progress on a bailout for Greece bolstered the outlook for fuel demand. Brent touched an eight-month high.

West Texas Intermediate crude rose as much as 1.2 percent today and is up 4.3 percent this week. The index of U.S. leading indicators rose in January for a fourth month. European governments may cut interest rates on emergency loans to Greece and use European Central Bank funds to plug a financing gap, two people familiar with discussions said.

Oil for March delivery rose to $103.57, the highest level since Jan. 5. Futures are headed for the biggest weekly gain since Dec. 23.

Brent oil for April settlement dropped 74 cents, or 0.6 percent, to $119.37 a barrel on the London-based ICE Futures Europe exchange. The contract touched $120.70, the highest level since June 15.