Investors poured money back into oil Monday, pushing the price up more than $5 and back over $100 a barrel.
Oil plunged 15 percent last week, its steepest drop in two and a half years. Monday, investors who felt oil had fallen too far, too fast sensed a bargain.
"Nothing fundamental happened between Friday and Monday," said Stephen Schork, publisher of the energy industry newsletter The Schork Report. "This just shows the power of speculators in this market."
Benchmark crude for June delivery rose $5.37, or 5.5 percent, to $102.55 a barrel in Monday trading on the New York Mercantile Exchange.
Some analysts think oil could still fall in the next days and weeks. That would benefit drivers, who are paying more than $4 for a gallon of gas in many big cities. But most experts agree that the long-term trend for oil is upward.
Monday's jump in oil prices may be what analysts refer to as a "dead cat bounce." That's a temporary rise in price that interrupts a generally downward trend.
High gasoline prices have cut into demand for oil. Also, the U.S. economy is not growing as fast as once thought. U.S. gross domestic product growth slowed to 1.8 percent in the first quarter.
"We expect oil to fall further as the global economy slows, the dollar continues to rebound, and the risk premium due to unrest in the Middle East eventually fades," Capital Economics said in a report.
Longer term, analysts expect oil and other commodities to get more expensive as the recovering U.S. economy and the growing economies of Asia increase demand for energy and raw materials.
"The fundamental backdrop in the market remains entirely unaltered, with global oil demand still showing continued strength," Barclays Capital said in a report. "The general (oil price) trend from here should be higher, rather than lower."
Gold, silver and corn also rallied Monday. Last week oil and other commodities fell dramatically because of a shift in the outlook for the U.S. dollar and other foreign currencies, especially the euro.
When the dollar falls, investors tend to buy commodities hoping they will gain value as the dollar weakens. When the dollar rises, investors tend to sell their commodities.
On Monday the dollar back fell slightly, helping bargain-hunters push oil prices higher. The Euro rose to $1.4343 from $1.4337.
Analysts say news from Greece and Europe will likely keep currency markets volatile. Commodity markets should follow.
European Union officials suggested over the weekend they may provide Greece more financial help. But Monday the rating agency Standard & Poor's downgraded Greece's debt further into junk status.
Last week's falling oil prices are beginning to benefit U.S. drivers. Gasoline prices fell overnight to a national average of $3.96 per gallon.
In London, Brent crude for June delivery was up $6.77, or 6.2 percent, to $115.90 a barrel on the ICE Futures exchange.
In other Nymex trading in June contracts, heating oil rose 11.61 cents, or 4.1 percent to $2.9618 a gallon and wholesale gasoline added 18.83 cents to $3.2784 a gallon. Natural gas futures fell 8.1 cents at $4.223 per 1,000 cubic feet.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.
Pablo Gorondi in London and Alex Kennedy in Singapore contributed to this report.