Oil prices climbed on Monday as the dollar fell against the euro and other currencies. Benchmark crude rose 83 cents to settle at $82.52 a barrel on the New York Mercantile Exchange.
In its weekly report on retail gasoline prices, the Energy Department's Energy Information Administration said the average price for a gallon of regular was $2.817 on Monday. That's 1.7 cents below a week ago and almost 14 cents higher than a year ago.
Average pump prices in major cities ranged from $3.16 a gallon in San Francisco to $2.62 in Houston. Drivers in Los Angeles paid about $3.15 a gallon, while gas stations charged $2.87 in New York. Gas cost about $2.94 in Chicago, $2.88 in Miami and $2.83 in Boston.
The dollar lost ground against the euro and fell to a 15-year low against the yen. That follows what JP Morgan analysts called a "rather bland" statement from the weekend G-20 meeting that said exchange rates should be determined by markets. "This is certainly nothing new, and the reality is currencies will continue to take a back seat to domestic priorities."
Oil prices tend to rise as the dollar falls, because oil is priced in dollars and becomes more attractive to holders of foreign currencies.
The G-20's lack of a firm position on currency devaluation makes it more likely that the Fed next month will announce more action to bolster the U.S. economy, possibly buying government securities, which will inject more money into the system. That's likely to weaken the dollar further and support higher oil prices.
It's not all about the dollar. Energy consultants MF Global said in a note to investors that "steady demand for raw materials from China and India are supporting oil. Additionally, industrial strikes in France, sparked by the government's plan to raise the retirement age have shut 11 refineries cutting gasoline production."
Energy analyst Phil Flynn notes that the French strikes have resulted in larger-than-expected exports from the U.S., which could show up in the Energy Department's weekly petroleum inventories report on Wednesday as lower supplies of oil and gasoline, a trend that's been evident for weeks.
"We are seeing clear trends in inventory surpluses declining against year-ago and two-year-ago levels," energy consultants Cameron Hanover said. "At the same time, though, we are seeing clear trends toward losing demand." If demand continues to drop, inventories will stop falling.
Natural gas prices are lower. The November contract hit a 52-week low of $3.255 at one point on Monday. "Forecast trends continue to show significantly milder weather for the next few weeks," JP Morgan said. "With these above normal forecasts, it is likely that we will see builds for the month of November that could rival those seen last year."
Natural gas for November delivery lost 1.5 cents to settle at $3.317 per 1,000 cubic feet on the Nymex.
In other energy trading, heating oil added 0.34 cent to settle at $2.2550 per gallon, and gasoline gained 1.35 cents to settle at $2.0773 a gallon.
In London Brent crude rose 58 cents to settle at $83.54 on the ICE Futures exchange.