Prices were also underpinned by expectations that weak data from China, the world's second-biggest oil consumer, would prompt Beijing to ease policy further, while festering tension between Iran and Israel added support.
The European Commercial Bank meets on Thursday and U.S. Federal Reserve policymakers will begin a two-day gathering on September 12.
"A lot of today's move is on expectations of stimulus, with the ECB and Fed meetings coming up," said Tony Nunan, an oil risk manager at Mitsubishi Corp in Tokyo. "That, and the steady drumbeat of news from Iran and the tensions with Israel, is keeping the heat under the market."
Front-month Brent futures had risen 23 cents to $116.01 per barrel by 0421 GMT. The contract had earlier climbed as high as $116.36, a few cents short of a three-week high.
U.S. crude futures added 72 cents to $97.19, although U.S. markets were closed on Monday for the Labor Day holiday. They could revisit the August 23 high of $98.29 as they have broken above resistance at $96.54.
CHINA WEAKNESS
China's vast manufacturing sector contracted in August, strengthening the view that the slowdown in the economy may extend into the third quarter.
Inflation and industrial data are due on Sunday, while trade numbers will be released on Monday, which may give a clearer picture of the state of the Chinese economy.
Complicating matters, the country's political leadership is set to change hands in a once-in-a-decade transition later this year.
"The steady bad numbers from China indicate beyond a doubt that growth is slowing, and with the change of guard coming up there will be pressure on the authorities to stimulate the economy," said Nunan.
In the short-term, however, investors are awaiting the outcome of the ECB meeting on Thursday. The bank is expected to give some details on a bond-buying scheme to help its crisis-ridden members.
Strengthening those expectations, ECB Chairman Mario Draghi told European lawmakers that the bank's purchases of short-term debt would not breach European Union rules, according to a recording obtained by Reuters.
"Investors are beginning to piece together a scenario under which ECB bond purchases will be limited to shorter maturities," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "Any such arrangement could remove short-term funding problems as a source of immediate concern for markets."
There are also hopes that the Fed, which meets next week, will provide further hints on whether it is leaning toward a third round of quantitative easing, or QE3, as the minutes of its last meeting suggested.
Traders however are not betting on a QE3 announcement on September 13. A poll of 61 economists last week gave a 45 percent chance of an announcement of QE3 after the September meeting.
IRAN, ISRAEL
Investors are also monitoring developments in the Middle East, with a focus on rising tensions between Iran and Israel.
Iran has built about 30 percent of a missile defense system it is developing in place of the Russian S-300 system Moscow refused to sell to the country, and hopes to complete the system by next year, a senior military official said on Monday.
Under mounting pressure from Israel and Western powers over its controversial nuclear program, Iran has unveiled upgrades to weapons systems and held several military exercises this year to demonstrate its ability to defend itself.
Separately, the leader of Lebanon's Iranian-backed militant group Hezbollah said on Monday that Iran could hit U.S. bases in the Middle East in response to any Israeli strike on its nuclear facilities, even if American forces played no role in the attack. – AGENCIES
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