FRANKFURT (MarketWatch) -- Oil futures rose on Monday, as the decline in the value of the dollar continued to attract investors into crude and outweighed the market's weak fundamentals. Crude oil for December delivery gained 87 cents, or 1.2%, to $77.22 a barrel in electronic trading on Globex. Earlier, it rose to an intraday high of $77.57. "Again, prices are following changes in the exchange rate," said Christophe Barret, global oil analyst at Calyon. "In the oil market itself there is little bullish news. Now we are getting only weak statistics on the oil front." Crude futures finished lower on Friday, and lost 1.4% last week, after a weak gauge of U.S. consumer sentiment dimmed the outlook for energy demand. The dollar slipped against major rivals on Monday, pressured by stepped-up rhetoric from China and better-than-expected Japanese growth data. The dollar index (DXY 75.08, -0.06, -0.08%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.4% to 75.051 in recent trading. The index has lost about 16% since early March. See Currencies. Oil is denominated in dollars, so a weaker dollar makes it cheaper for investors holding other currencies. "The exchange rate has been the main factor for the past few weeks," Barret said. "[However,] it's physical market. It's cannot stay out of balance for very, very long." He said that fundamental factors -- such as weak demand and high levels of supply -- should start to exert downward pressure on oil prices. Oil prices are likely to decline to $60 a barrel at the end of second quarter of 2010, he said. Elsewhere in the commodity markets, December contract surged to a fresh high above $1,130 an ounce, buoyed by dollar weakness. See Metals Stocks.

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