Crude oil rose for the first time in three days on Friday, as the dollar fell against the euro and on optimism that Asia's emerging economies will bolster fuel demand.
Oil traded above $80 a barrel as the euro rose from a 10- month low after European leaders agreed on an aid plan for Greece.
The Organization of Petroleum Exporting Countries (OPEC) is poised to increase shipments in the month ending April 10, which is led by Asian demand, according to Oil Movements.
Crude is poised for a 0.5 percent gain this week after two weeks of declines.
“The fact that oil still benefits from a weaker dollar, but does not react so much to the stronger dollar is a sign of bullish sentiment,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
“Imports by Asian refiners are still strong but we expect seasonally weaker demand to lower prices in the second quarter.”
Crude oil for May delivery rose as much as 93 cents or 1.2 percent to $81.46 a barrel in electronic trading on the New York Mercantile Exchange and traded for $81.09 at 12:28 p.m London time.Brent crude oil for May settlement was at $80.35; 74 cents higher on the London-based ICE Futures Europe exchange.
The euro gained for the first time in four days against the dollar after European Central Bank President, Jean-Claude Trichet toned down his opposition to the International Monetary Fund's involvement in a Greek rescue plan. A weaker dollar increases the appeal of commodities as an inflation hedge.
The euro advanced to $1.3376 from $1.3273 after falling to $1.3268, the weakest level since May 7.
A weak U.S. currency bolsters the appeal of dollar-priced assets such as crude that can be used to hedge against inflation.
OPEC, which supplies about 40 percent of the world's crude, would ship 23.39 million barrels a day in the four-week period, compared with 22.99 million in the month ending March 13, the Halifax, England-based consultant said yesterday in a report, but the data excludes Ecuador and Angola.
“If there is any upward movement in OPEC supply at this time, it is probably coming to Asia,” said Geoff Clear, Head of Asia commodities at Australia & New Zealand Banking Group in Singapore.
Oil prices would jump almost 20 percent this year, driven by demand from China and emerging markets, according to UniCredit SpA.
Prices may rise to $95 a barrel in the fourth quarter and $115 by the end of 2011 from $81, said Jochen Hitzfeld, an analyst at UniCredit in Munich.
Crude futures may fall next week as U.S. inventories increase imports, a Bloomberg News survey revealed.
According to the survey, 21 out of 55 analysts or 38 percent predicted that oil would decline through April 1 2010.
19 respondents or 35 percent predicted that there would be a little change and 15 said the contract would climb. Last week, 45 percent of analysts said there would be a drop in prices.
U.S. stockpiles of crude oil rose 7.25 million barrels to 351.3 million last week, leaving supplies 6.4 percent above the five-year average for the period, according to an Energy Department report on March 24.
It was the eighth straight advance and the longest string of gains since May 2009.
U.S. gasoline consumption peaks during the so-called summer driving season, which lasts from the Memorial Day weekend in late May to Labor Day in early September.
