Oil rose for a third day 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 jumped to an eight- month high before reversing its advance.

Oil fell from the highest price in almost five weeks on speculation that U.S. crude supplies are rising and demand for fuel may falter as Europe grapples with lower credit ratings.

Oil rebounded from a three-day low in New York after Greece’s parliament approved austerity measures to secure an international bailout, easing concern Europe’s debt crisis will worsen and curb fuel demand.

Oil headed for a weekly decline before a report that may show U.S. employers hired fewer workers last month than in December. Brent crude’s premium to the New York price is set for the largest weekly gain in a month.