LONDON, Oct 26, 2009
Oil rose above $81 a barrel on Monday, rebounding from an earlier decline, as a falling U.S. dollar and gains in U.S. equities outweighed a weak oil supply and demand picture.
The dollar weakened against a basket of currencies, making oil cheaper for holders of other currencies. U.S. stocks opened higher after a sell-off in the previous session.
"The financial market environment is still supportive for oil prices despite still weak fundamental data," said Carsten Fritsch, analyst at Commerzbank.
U.S. crude for December delivery was up 92 cents to $81.42 by 1351 GMT, having earlier fallen as low as $79.57. It reached a 2009 high of $82.00 on Oct. 21. Brent crude <LCOc1> rose $1.00 to $79.92.
The dollar fell to a 14-month low against the euro. A Chinese report saying Beijing should increase its holdings of euros and yen in its foreign reserves knocked the U.S. currency, reports Reuters.