LONDON (AFP) –
World oil prices rallied Monday, buoyed by the weak dollar, rising stock markets and optimism that upcoming US data will show a solid recovery in the world's biggest energy consuming nation.
New York's main contract, light sweet crude for delivery in May, soared 2.36 dollars to 82.36 dollars a barrel.
London's Brent North Sea crude for May surged 2.20 dollars to 81.49 dollars per barrel.
"Probably the main reason is the weakness in the dollar," said analyst Phil Flynn at PFG Best Research.
The euro strengthened against the dollar on Monday as the single currency won further support from last week's deal by European leaders to rescue Greece from its debt crisis, dealers said.
The lower greenback makes dollar-priced commodities cheaper for buyers using stronger currencies, and tends to stimulate demand and lift prices.
"The market seems to want to believe that the Greek crisis is behind us, and we got some good economic data on consumer spending that gave us a little bit of a boost as well," said Flynn.
He added that the volatile price swings were likely to be exaggerated because of light trading volumes before the Easter holiday break.
"In a holiday week you can always see exaggerated moves because the volume is going to light up."
Wall Street opened higher on Monday as investors were also buoyed by last week's EU deal to bail Greece out of its debt crisis and on news that US income data contained no negative surprises.
The Institute of Supply Management will release its index on US manufacturing growth on Thursday and the Labor Department's report on non-farm payroll employment is to follow Friday.
"Increasing economic optimism in the run-up to US employment data, to be released on Friday, boosts oil prices at the start of the week," said Commerzbank analyst Carsten Fritsch in a note to clients.
Oil had fallen on Friday after weaker-than-expected US economic growth data overshadowed the impact of the Greece plan.
Friday's data showed the US economy grew at a slower pace than previously thought in the fourth quarter, as business and consumer spending slackened amid a fragile recovery from recession.
The US economy grew 5.6 percent in the October-December period, the Commerce Department said, revising downward an earlier estimate of 5.9 percent.
Across in Mexico this week, the world's largest forum of energy producers and consumers will meet for talks on tackling major industry concerns including oil-price volatility and the outlook for supply and demand.
The International Energy Forum (IEF), which groups together energy producing and consuming countries accounting for more than 90 percent of global oil and gas supply, holds its latest biennial conference in the beach resort of Cancun.
The two-day ministerial conference beginning Tuesday will build on the 11th IEF in Rome in 2008 and two ad hoc meetings in Jeddah and London in the second half of that year when oil prices spiked to record highs before plunging.
