Oil jumps above $60 on weak US currency

Oil prices rose sharply today, with the New York contract hitting a six-month high above $60 as the US currency tumbled against other leading units, traders said.

New York's main futures contract, light sweet crude for delivery in June, jumped to $60.08 per barrel, its highest point since mid-November before slipping back to $59.59, up $1.09 on yesterday's close.

Brent North Sea crude for June rose 88 cents to $58.36.

The gains came as the euro soared to $1.3707, its highest level for one and a half months. A weak dollar stimulates demand for dollar-priced crude because it becomes cheaper for buyers using stronger currencies.

Oil prices have found support in recent days from rallying stock markets and a falling dollar rather than from signs of rebounding demand for energy, according to analysts.

"This market seems to have found a bit of a comfort zone (at current price levels)," said Dave Ernsberger, a senior editorial director at energy information provider Platts.

Many market watchers believe the dollar is likely to decline against most rival currencies in the coming months as risk aversion recedes on hopes the worst of the global slump is over.

However, Ernsberger said he expects the rally in oil prices to weaken as the ailing global economy will keep demand down.