Concerns about an extended refinery strike in France and escalating tensions over Iran's nuclear program also lent support to oil prices.
U.S. crude for March delivery rose 42 cents to $80.23 a barrel by 0737 GMT, after having struck $80.51 -- the highest since Jan 13. London Brent crude rose 48 cents to $78.67 a barrel.
"The weak dollar is the biggest driver for crude prices this morning and hopes of a financial rescue for Greece are propping up sentiments," said Clarence Chu, a trader with Hudson Capital Energy in Singapore.
The U.S. dollar index fell 0.18 percent against a basket of currencies on Monday, as investors reassessed chances of an earlier-than-expected interest rate hike by the Federal Reserve while the euro was lifted by speculation of a quick bailout for Greece.
German weekly Der Spiegel reported on Saturday that Germany's finance ministry had prepared plans in which countries using the single currency would provide aid worth between 20 billion and 25 billion euros for debt-laden Greece. The ministry refused to comment on the report.
Hopes of a swift bailout for Greece also helped push Asian stocks higher and spurred gold and grains to rally.
Concern over Athens' ability to repay its debt mountain has shaken confidence in the euro and stirred fears that it may hinder global growth. Some analysts have said that a plan to rescue Greece would help allay sovereign debt concerns in Europe.
Adding to bullish sentiments was a report by the China Petroleum and Chemical Industry Association (CPCIA) that said China processed 30.14 million tonnes of crude in January, up 29 percent from a year earlier.
Separately, an extended strike at Total's six oil refineries in France and growing hostility between Iran and the West also aided bullish sentiment for crude.
Talks between Total and workers protesting the possible closure of the company's Dunkirk refinery in northern France collapsed on Sunday, the CGT union said, calling for a strike to spread to all French refineries.
An extended strike would lift Europe's gasoline prices and also push up prices across the energy complex, market participants said.
Russia said on Friday it was "very alarmed" by Iran's failure to cooperate with the IAEA, after the U.N. nuclear agency said it feared Tehran might be working to develop a nuclear missile.
Oil prices rose 7.7 percent rise on the week, their largest single-week percentage gain for front-month crude since October, thanks to a combination of positive economic data and growing tensions over sanctions against Iran.
Analysts said Wall Street could keep rallying after notching its best week this year if Federal Reserve Chairman Ben Bernanke gives a reassuring assessment of the recovery and retail earnings show improvement.
On OPEC rumblings, a senior Iranian oil official said on Saturday the producer group was unlikely to raise its output ceiling at its next meeting in March.
Also on Monday, Goldman Sachs said that benchmark oil prices will rise to $85-$95 a barrel this year as global economic growth accelerates, up from the low-$70 to low-$80 range since October last year.
[Reuters]
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