Oil rose above $52 a barrel on Monday, supported by a weak dollar and rising stock markets after the United States gave details on its plan to remove toxic assets from bank balance sheets.
The U.S. government fleshed out the plan on Monday which it hopes can purge banks of up to $1 trillion in toxic assets, a key element of its drive to pull the world's biggest economy out of a deep recession.
This rally is linked to the dollar and financial considerations, said Olivier Jakob, oil analyst at Petromatrix, who added there had been no major change in the fundamentals of oil supply and demand since last week.
U.S. crude rose 44 cents to $52.51 a barrel by 8:34 a.m. EDT having earlier climbed to $52.90, the highest price since December 1. London Brent crude rose 57 cents to $51.79.
The U.S. dollar was down slightly on Monday, a trend that can boost investor demand for oil and other commodities, while stock markets in Asia rose and European shares were up more than 1 percent <.FTEU3>.
President Barack Obama said on Sunday the U.S. dollar is still strong but warned that excessive borrowing and high deficits could weaken Treasury bill demand.
Oil has climbed from below $33 reached last December, lifted also by Organization of the Petroleum Exporting Countries supply cuts. It remains down almost $100 from a record high near $150 reached last year as the global economic crash eroded consumption.
The global economy is set to shrink by 1 to 2 percent this year, World Bank President Robert Zoellick said on Saturday. He said the depth of the slowdown was unprecedented since the 1930s Great Depression.
Signs of higher demand in China, the world's second-largest consumer, could lend support. China's implied oil demand climbed 0.5 percent in February after three months of decline, Reuters calculations from official data showed.
Oil workers at Brazilian energy firm Petrobas
(Reporting by Alex Lawler; additional reporting by Fayen Wong; Editing by Anthony Barker)