NEW YORK, United States—Oil prices climbed Monday amid a weak dollar and rising demand expectations boosted by growth prospects, including in Japan, the world's second largest economy.
Opec, the cartel of key oil producers, also signaled that $75-80 a barrel was a satisfactory level for crude.
New York's main contract, light sweet crude for delivery in December, soared $2.55 to close at $78.90 a barrel.
London's Brent North Sea crude for January delivery jumped $2.45 to settle at $78.76 a barrel.
The dollar continued to weaken Monday despite Federal Reserve chief Ben Bernanke's rare comment that the central bank strove for a strong dollar, in an effort to ensure financial stability.
His statement, in the face of growing complaints about the sliding greenback, including from China, however had little impact on the greenback.
Bernanke's comments caused a brief rise in the value of the greenback against the euro, which has been appreciating the most against the dollar.
The euro fell from $1.4971 ahead of the speech to as low as $1.4881, but then rebounded above $1.50 later in the day.
Analysts said unless Bernanke's talk was backed by action on interest rates, currently at an exceptionally low level aimed at spurring growth in the world's largest economy, his comments would do little to lift the dollar's fortunes.
The lower greenback makes dollar-denominated commodities—like gold and crude oil—cheaper for buyers using stronger currencies. In turn, that tends to lift demand and prices.
"Oil continues to be buoyed by the faltering US dollar. Oil’s negative correlation with the US dollar remains impressive and no doubt is frustrating to bears," said analyst Hussein Allidina with Morgan Stanley.
The energy market was also boosted by news that Japan's economy grew 1.2 percent in the third quarter of 2009 from the previous quarter—the fastest pace in two-and-a-half years and much better than expected.
Market hopes of higher oil demand were also enhanced by a 1.4 percent jump in retail sales in October, well ahead of expectations, even though a large portion was from the volatile auto sector.
Meanwhile in Abu Dhabi on Monday, Opec president Jose Maria Botelho De Vasconcelos repeated the cartel's view that $75-80 oil was an adequate level to allow for a global economic recovery.
"Seventy-five to 80 dollars a barrel is a good price... for the recovery of the world economy," he said.
De Vasconcelos, who is also Angola's oil minister, was speaking at a conference on Gulf energy security in Abu Dhabi.
He also said the rate of compliance by Opec members with their production quotas "is around 65 percent." This rate is satisfactory, he added.
The Organization of Petroleum Exporting Countries (Opec), whose members pump about 40 percent of the world's oil, will review production quotas at a key meeting in Luanda, Angola, on December 22.
Opec expects oil demand to rise by 20 million barrels a day (bpd) to 106 million by 2030, he said, but warned of uncertainty in the market.
