AnalysisCrude oil rebounded above $78 a barrel after two days of decline as the U.S. dollar slipped against majors and as tensions in Iran threatened crude supply from the world's fourth largest producer.

The green currency fell for the first time in three days on Monday on rumors the FED will keep their expansionary monetary policy for a while which raised concerns that the economy is still suffering and needs another boost. The dollar index, a gauge of the dollar's movements versus a basket of major currencies slumped today to 75.10 compared with the opening at 75.59. The dollar's slide encouraged demand on commodities as a hedge against inflation. Gold reached a new fresh high today above $1166 an ounce.

On the other hand, the tensions with Iran with regard its nuclear program made the country undertakes air defense show on Sunday. Sanctions and may be military attacks may take place on Iran in the coming period, threatening crude supplies from the large oil producer. 

Despite the rise in crude prices today, there are some economic woes concerning economic recovery. U.S. stocks plummeted in the U.S. after the decline in technology companies' earnings such as Dell. However, Asian stocks gained today as commodities rose, where gold recording a new high. Later on today, U.S. will release existing home sales data which cause a change in markets.

December's contract expired on November 20; meanwhile, oil is traded at $78.30 recording a high of $78.50 and a low of $77.72, whereas the contract on Friday edged down $0.58 closing at $77.47, while recording a high of $78.61 per barrel and a low of $76.76 per barrel.