European stocks crept higher on Tuesday, catching the tailwind of a pre-holiday U.S. rally, while the euro was hamstrung by the prospect of a large Italian debt auction later in the week.
Oil prices were buoyed by positive U.S. jobs and housing data late last week as well as the prospect of sanctions against Syria choking off production there.
Oil prices jumped more than $1 on Tuesday after Iran threatened to cut off a key oil shipping route through the Strait of Hormuz while world stocks were little changed as a four-day Wall Street rally lost steam.
The euro was stuck near an 11-month low as investors feared thin market liquidity could complicate Italy's plans to raise 8.5 billion euros in capital markets later in the week, renewing pressure on the euro zone.
Trading volumes were low in most markets as traders returned to their desks for the shortened week between the Christmas and New Year holidays.
U.S. crude oil prices shot up $1.59 to $101.27 a barrel as traders feared possible disruptions in supplies from the Middle East.
