Oil prices rose half a dollar to a one-week high near $107 a barrel on Monday as traders feared more losses for the dollar and Opec's secretary general suggested the group saw little need to pump more oil.
US light, sweet crude for May delivery rose 38 cents or 0.4 per cent to $106.61 a barrel by 0638 GMT after leaping $2.40 a barrel on Friday, recouping all of the week's earlier losses as investors sought shelter from the falling US dollar.
Prices hit an earlier high of $106.91. London Brent crude rose 14 cents to $105.04.
The dollar fell on Friday after a US government report showed employers slashed payrolls a third-straight month in March, cutting 80,000 jobs, the biggest monthly decline in five years.
Although it rallied against the yen on Monday as traders focused on fund allocations by Japanese investors at the start of the fiscal year, most commodity prices were broadly higher as traders anticipated a continued shift of money into the sector.
"The key driver will be continued financial investors inflows into oil," said Societe Generale in a report, reasserting its $107.50 forecast for average oil prices in the second quarter.
"On balance, we take comfort in the fact that front-month crude prices appear to have found a floor at $100, and appear to be trending sideways."
As oil prices resume climbing toward their March 17 record high of $111.80, Opec officials have stuck to their familiar refrain over the well-supplied state of the market.
"Oil supply to the market is enough and high oil prices are not due to a shortage of crude but rather it is because of the decrease in the dollar's value, shortage of refinery capacity and some political tensions in the world," Opec Secretary-General
Abdullah al-Badri was quoted as saying by Iran's official IRNA news agency.
"Opec is not under any pressure... to raise crude output," Badri told reporters in Tehran, IRNA reported, adding that there were no plans to hold an emergency meeting ahead of its next planned gathering in September.
Opec is also concerned about the potential impact of an economic slowdown in the United States on oil demand from the world's biggest consumer.
Data from the US Energy Information Administration showed average implied oil demand in the United States over the first 13 weeks of the year down more than 479,000 barrels per day (bpd) from a year ago.
Crude oil speculators on the New York Mercantile Exchange have more than halved their bullish price bets since they neared an all-time peak in mid-March, regulatory data showed.
Net long positions last week slipped to 47,073 lots from 53,892 in the previous week.
Friday's gains had also been fuelled by news of a fire at Exxon Mobil's 150,000-bpd Los Angeles-area refinery in Torrance, California, which forced the closure of a hydrotreater, raising concerns about summer gasoline supplies. (Reuters)
Oil climbs toward $107 a barrel