Oil price reaches six-week high as dollar weakens

Oil is now above $80 a barrel

The price of oil has risen to a six-week high as reports of a rescue for debt-laden Greece lifted the euro and helped push the US dollar lower.

A weaker dollar makes oil cheaper for buyers in other currencies. The euro rose 0.3% to $1.3608 in Monday trading.

It had fallen to a nine-month low of $1.3477 on Friday after the US Federal Reserve lifted a key interest rate.

US light crude hit $80.51 a barrel at one point, before falling back to $80.16, up by 35 cents.

In London, Brent crude added 42 cents to settle $78.19.

'Propping up sentiments'

German magazine Der Spiegel reported over the weekend that Germany's finance ministry had come up with a plan that would see countries that use the euro providing aid worth between 20bn and 25bn euros (£17.6bn-£22bn) for Greece.

It's unlikely to see a level of $80 being sustained given still-weak fundamentals - physical demand is still lacklustre, outside China at least Carsten Fritsch, analyst at Commerzbank

"The weak dollar is the biggest driver of crude prices this morning and hopes of a financial rescue for Greece are propping up sentiments," said Clarence Chu, a trader with Hudson Capital Energy in Singapore.

Oil analysts said prices were also being lifted by figures showing an increase in oil refining in China, and the continuing strike by Total refinery workers in France.

The China and Petroleum and Chemical Industry Association said China processed 30.14 million tonnes of crude oil in January, 29% higher than a year earlier.

Meanwhile, talks to end the strike at Total's six French oil refineries ended without success on Sunday.

The Total workers have been on strike for more than a month, in protest at the possible closure of the firm's refinery in Dunkirk on the English Channel coast.

Continuing signs of economic growth in the US - the world's largest oil consumer - are also lifting global oil prices.

However, some oil analysts now expect oil prices to soon start to fall back.

"Oil looked toppish at $80, that's the upper end of the trading range," said Carsten Fritsch, analyst at Commerzbank.

"It's unlikely to see a level of $80 being sustained given still-weak fundamentals - physical demand is still lacklustre, outside China at least."