Crude oil prices raced ahead on Monday as the dollar traded lower and on hopes that the US Federal Reserve will take action to stimulate the economy.
Crude for August delivery rose $1.33 to settle at $88.43 a barrel on the New York Mercantile Exchange as expectations increase that the Fed may activate another round of so called quantitative easing where long-term interest rates are lowered.
Fed chairman Ben Bernanke speaks before congressional panels from Tuesday and markets will keen to hear if he gives any clues on potential stimulus measures following a wave of weak data on the US economy.
Monday proved no exception in terms of weak data as US retail sales figures disappointed. Shares on Wall Street retreated into the red after retail sales fell 0.5% between May and June, registering the third consecutive month of weakening data.
The weaker dollar helped maintain interest in crude oil futures however as it makes it cheaper for holders of other currencies.
The ICE dollar index, which measures the US unit against a basket of six trade-weighted currencies, fell to around 83.192 from 83.324 the previous session.
Traders also mulled comments from China Premier Wen Jiabao over the weekend that the economic recovery was not yet stable.
Among precious metals gold futures closed a touch lower on Monday, down 0.1%, following the cautionary comments from Premier Wen Jiabao and the weak US retail sales.
Gold for August delivery fell 40 cents to settle at $1,591.60 an ounce on the Comex division of the New York Mercantile Exchange.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
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