By midday, benchmark crude for April delivery rose 17 cents to $79.83 a barrel on the New York Mercantile Exchange. Earlier in the session, prices peaked at $80.62.

On Friday, the contract added $1.49 to settle at $79.66.

Oil traders, who often look to equities as a measure of overall investor sentiment, were cheered by a jump in all the major stock indexes Monday.

Equity markets were boosted by hopes that Greece's debt-ridden economy would soon be rescued and a slowdown in Chinese manufacturing growth, which eased fears of more government measures to cool the economy.

Oil prices were also supported by rising copper prices in the wake of a massive earthquake in Chile, the world's top copper producer.

Crude prices were “benefiting from spillover buying emanating from copper, where prices are surging in the aftermath” of the earthquake, said Edward Meir, senior commodity analyst at MF Global in New York.

Weighing on oil prices was a stronger dollar, which makes crude more expensive for international investors.

The dollar jumped to a 9-month high against the pound and extended its rise against the euro as worries about Greece's financial stability, a possible European bailout plan and uncertainty about UK government and debt sent investors to the US currency's safety.

In morning trading in New York, the British pound tumbled below $1.50 for the first time since May 2009. The 16-nation euro dropped to $1.3526 from 1.3620 late Friday.

This week, investors will be eyeing US jobs data to get a better sense of the recovery in the world's largest economy. The Labor Department is scheduled to announce February's unemployment rate on Friday. Joblessness was 9.7 percent in January.

Oil prices have touched the low $80 level several times in the last six months, but fallen back into the $70s when US crude inventory data failed to justify investor optimism.

In other Nymex trading in April contracts, heating oil rose 1.25 cents to $2.0478 a gallon, and gasoline gained 0.32 cent at $2.1911 a gallon. Natural gas prices fell 5.3 cents to $4.760 per 1,000 cubic feet.

In London, Brent crude was up 31 cents at $77.90 on the ICE futures exchange.