Oil prices rose on Tuesday to above $80 a barrel after a late-season hurricane disrupted oil and gas output in the Gulf of Mexico and the dollar stayed close to a 15-month low.
U.S. crude for December delivery was up 92 cents to $80.35 a barrel by 1525 GMT, after trading most of the session below yesterday's close of $79.43.
London Brent crude was up $1.01 at $78.78.
Hurricane Ida, the first real weather threat to oil production of the 2009 season, was downgraded to a tropical depression on Tuesday, but output remained curtailed as producers awaited its passage out of the Gulf.
Ida shut in 29.6 percent of oil production and 27.5 percent of gas output from the Gulf of Mexico, the U.S. Minerals Management Service said Monday.
Traders said other reasons for oil's gains were the dollar's ongoing weakness, which has also spurred gold to record highs above $1,100 an ounce.
We've held onto the hurricane gains, but the strength in gold above $1,100 and the weak dollar are the reasons we haven't come down more, said Christopher Bellew, a broker at Bache Commodities.
The dollar rose on Tuesday from a 15-month low, but analysts said the trend of dollar weakness was still in place, potentially providing support for dollar-denominated commodities.
Looking to the long term, the International Energy Agency published its annual World Energy Outlook on Tuesday, forecasting a rise in primary energy demand globally by 1.5 percent every year until 2030, and calling for $26 trillion in investment to meet the expected demand. [ID:nLAE000066]
Market reaction to the report was negligible because the annual report is a projection on the basis of a scenario, trying to look 20 years out, Harry Tchilinguirian, senior oil analyst at BNP Paribas, said.
Long term it's an important guideline, but any reactions in oil short-term will be on dollar moves, equity markets and central bank decisions, he said.
Market-wise, the big issue is how commodities are being targeted by investors looking for yield as a result of accommodative monetary policy, Tchilinguirian said.
The latest snap shots on near-term fundamentals will come from U.S. inventory data.
Analysts predicted U.S. crude oil inventories last week rose slightly because of higher imports, according to analysts polled by Reuters late on Monday.
Industry group the American Petroleum Institute (API) will release weekly inventory data later on Tuesday, while a report from the U.S. Energy Information Administration (EIA) will be delayed from Wednesday to Thursday due to a federal holiday on November 11.
Oil prices have more than doubled from a low of less than $33 touched in December, although they are still barely half their high of more than $147 a barrel touched in July last year.
The catalyst for this rally has been, in our view, long-anticipated signs of improvement in oil fundamentals in the context of generally constructive economic data, analysts at Goldman Sachs wrote in their Commodity Watch note to investors.
Strong emerging market demand has pulled supply elsewhere, reducing U.S. petroleum imports. Specifically, Chinese oil demand continues to surge, driven by strong economic activity.
(Additional Reporting by Felicia Loo in Singapore; editing by Keiron Henderson)