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NEW YORK: Oil prices shot higher for the third session in a row on Monday, driven by improved economic recovery prospects and a weaker dollar.
New York's main contract, light sweet crude for September delivery, jumped 2.13 dollars to close at 71.58 dollars a barrel.
The New York benchmark contract hit an intraday peak of 72.20 dollars, its highest level since late June, and has gained more than eight dollars over the past three sessions.
In London, Brent North Sea crude for delivery in September rose 1.85 dollars to settle at 73.55 dollars a barrel. Earlier Brent climbed to 73.95 dollars, a level last seen on October 15.
Independent trader Ellis Eckland said there was "a rush of money into commodities based on currency fears."
"The dollar has been very weak for two days straight. That's leading a lot of money into the oil market," Eckland said.
"If the dollar continues to fall ... you could see oil make a run to 100 dollars, a very powerful sustained move up," he added.
The euro soared above 1.44 dollars Monday, returning to its highest levels in eight months against the US currency.
The weaker US unit makes dollar-priced oil more attractive to buyers with stronger currencies.
"Commodities, particularly oil, are a primary driver of rising prices in the macro economy and thus, would logically be bought as an inflation hedge" when the dollar slips, said John Kilduff of MF Global.
The dollar fell largely because of better-than-expected readings Monday on industrial activity in the United States, the eurozone and China, which were "fundamentally bullish factors," Eckland said.
While the outlook for oil demand appears to be brightening, crude supplies are at risk of falling short, one economist warned.
A disastrous energy crunch is looming because most of the major oil fields in the world have passed their peak production, said Fatih Birol, chief economist with the Paris-based International Energy Agency.
In an interview with Britain's Independent newspaper, he added that such an "oil crunch" within the next five years could jeopardise recovery from the global recession.
Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could derail the recovery, Birol said. - AFP/de
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