Oil prices rose to near $83 a barrel Monday as the U.S. dollar fell in the wake of the weekend Group of 20 meeting.
By early afternoon in Europe, benchmark oil for December delivery was up 87 cents to $82.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.13 to settle at $81.69 on Friday.
Finance ministers and central bank governors from the Group of 20 major advanced and emerging nations pledged Saturday to not aggressively devalue their currencies in a bid to keep their exports competitive, but the meeting failed to produce any detailed policy initiatives.
Investors were interpreting the outcome of the G-20 meeting as a sign that policymakers will tolerate a weaker dollar without seeking to retaliate, said Victor Shum, an energy analyst with consultancy Pervin & Gertz in Singapore.
The euro jumped to $1.4040 from $1.3931 late Friday, while the British pound rose to $1.5742 from $1.5669 and the dollar fell to 80.62 yen from 81.50 yen.
Commodities such as crude often rise when the dollar falls because they become cheaper to investors holding other currencies.
Crude will likely trade between $80 and $83 until the Federal Reserve details possible measures to spur economic growth, known as quantitative easing, at its meeting next week, Shum said.
Some analysts argue that the price of oil is the key to whether Asia maintains its strong economic growth.
If crude rises much higher it will spark inflation, which regional policymakers will seek to quell with interest rate hikes and capital controls, which would in turn trigger an economic slowdown, said Frederic Neumann, co-head of Asian Economics Research at HSBC.
"Energy prices are crucial," Neumann said. "If oil heads to $100 per barrel, or higher still, you'll know that it's back to 2008 and another bust."
Weather factors in the Gulf of Mexico were also seen supporting oil prices.
"Hurricane Richard is providing psychological support, as this could hit Mexico's oil production in the Bay of Campeche ... in the next few days," said analysts at Commerzbank in Frankfurt about a region providing two-thirds of Mexico's oil output. "Mexico is one of the leading oil suppliers to the U.S., so this could result in falling U.S. imports and a decline in U.S. inventories."
In other Nymex trading in November contracts, heating oil rose 1.85 cents to $2.2876 a gallon and gasoline gained 1.41 cents to $2.0681 a gallon. Natural gas fell 1.6 cents to $3.316 per 1,000 cubic feet.
In London, Brent crude rose 74 cents to $83.70 a barrel on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.