Commodities: Oil bounces above $77

Date: Wednesday 17 Feb 2010

The weaker dollar helped crude oil futures rally by nearly $3 on Tuesday, as investors dipped back into riskier investments.

The euro recovered ground against the dollar as concern about Europe's debt problems started to ebb away. EU leaders have given Greece a month to prove it can tighten spending.

A strong New York area manufacturing report also took the focus away from debt worries in Europe.

Crude oil for March delivery settled up $2.88 at $77.01 a barrel at the New York Mercantile Exchange as risk returned to the table.

Oil was also boosted by a slice of political tension. Rising tensions between Iran and the West gave oil prices a further lift on Tuesday as President Mahmoud Ahmadinejad said talks were still going on over a proposed nuclear fuel swap. He added that any country that tries to impose new sanctions on Iran would regret it.

The weaker dollar prompted strong gains for gold futures. Gold for April delivery rose $29.80 per ounce to settle at $1,119.80 in New York.

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