London: Oil extended gains to rise above $80 (Dh293.84) a barrel yesterday, lifted by a rally in the copper price, a steady US dollar and bullish global economic data.

US crude for April delivery rose 79 cents to $80.45 after having climbed by as much as 96 cents. On Friday, the contract settled up $1.49 at $79.66 and posted its biggest monthly percentage gain since May 2009.

London Brent crude rose 76 cents to $78.35.

Jump in futures

Copper futures jumped to their highest in more than five weeks yesterday after a massive earthquake in top producer Chile on Saturday sparked supply worries and threats of a new 2010 peak for the widely-used metal.

"These raw materials have a huge correlation, because when China and other emerging markets pick up speed they will need copper and steel and fuel," said analyst Andy Sommer at EGL in Switzerland.

"Overall today's market move is also related to bullish sentiment in general and a bit of dollar weakness."

Chile's state energy company ENAP said it would raise diesel imports after two of its refineries were damaged by Saturday's 8.8 magnitude earthquake. Analysts said the move would have a limited impact on crude prices.

The euro was stable against the dollar yesterday, as signs emerged that a support deal for Greece may be near. Commodities priced in a weakening US currency become more expensive to holders of other currencies.

Softer dollar

"Oil prices are also benefiting right now by the fact that the dollar is weaker against the euro," said senior commodity analyst Ed Meir at MF Global.

Any progress towards an aid plan for Athens could boost the euro, as well as bond prices and banking stocks in Greece and other indebted countries on the euro zone's southern periphery.

But any rally by the euro might be brief, because investors would also worry that a dangerous precedent was being set for Germany and other rich states in the zone to take on the liabilities of poorer ones.

On Sunday a senior military official from Iran, the world's fourth-largest exporter of crude, said the country could make Eur-opean nations suffer by cutting off energy supplies and could target any adversary with its missiles.

Iran is disputing its nuclear energy programme with the US and its allies, who say it is aimed at developing weapons. Tehran says it is only interested in power generation and medical research.