LONDON, Jun 14 – Oil prices rallied on Monday as a weaker dollar lifted demand for the key commodity, analysts said.
Brent North Sea crude for delivery in July jumped 1.52 dollars to 75.87 dollars a barrel in late afternoon London trade.
New York\’s main futures contract, light sweet crude for July, gained 1.75 dollars to 75.53 dollars.
"It seems that risk appetite is back again on the table as global equity markets are recovering strongly while the weakening US dollar is still supportive for further gains in the energy market," said Sucden Financial analyst Myrto Sokou.
The euro was higher against the dollar on Monday, extending gains on hopes that positive data means the eurozone debt crisis will not derail the global economic recovery, dealers said.
The European single currency rose to 1.2279 dollars from 1.2106 dollars in New York late Friday.
A weaker dollar boosts demand for dollar-priced commodities as they become cheaper for buyers holding rival currencies.
Only a week ago, the euro plunged to a four-year dollar low on the back of heightened concerns about the eurozone debt and deficit crisis, hitting 1.1877 dollars on Monday June 7.
The dollar and euro found support on Monday as rising stock markets helped bolster risk appetite, with investors ready to take on riskier assets on the view that the global economy remains on recovery track.
Oil markets were recovering from a dip on Friday, when traders were spooked by a US government report showing retail sales in May plunged for the first time in eight months.
Retail sales unexpectedly dipped 1.2 percent to 362.5 billion dollars from April. Most economists had expected a 0.2 percent rise in May.
The monthly report is a primary indicator of consumer spending, a linchpin of the US recovery accounting for two-thirds of the country\’s economy.
At the same time, however, the University of Michigan\’s consumer index rose to 75.5 in June from 73.6 in May, its highest since January 2008 and a percentage point better than expectations.