Oil Prices Rise to Mid-$94 a Barrel

There is also doubt a possible OPEC output hike next month would get more supplies to market in time for the northern winter.

The comments on the dollar came at a weekend summit, where the heads of state of the Organization of Petroleum Exporting Countries sought to find ways to mitigate the adverse impact the decline of the American greenback has had on their revenues.

Oil is priced in U.S. dollars and the currency's depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves. Cartel officials have resisted pressure to increase oil production to ease prices.

"The fact that the OPEC members are talking about issues like the weak U.S. dollar and not talking about raising output is supportive of strong pricing and so we're seeing signs of the market gaining strength," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Light, sweet crude for January delivery rose 69 cents to US$94.53 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract rose US$1.77 to settle at US$93.84 a barrel on Friday.

Calling the U.S. dollar a "worthless piece of paper," Iranian President Mahmoud Ahmadinejad said Sunday in Riyadh, Saudi Arabia, the cartel's members have expressed interest in converting their cash reserves into a currency other than the U.S. dollar -- a sentiment echoed by Venezuelan President Hugo Chavez, who called the euro a better option.

There had been speculation over whether OPEC would raise production at the meeting following recent oil price increases that have closed in on US$100 a barrel. U.S. Energy Secretary Samuel Bodman had called on OPEC to raise output last week, but cartel officials say they will hold off any decision until the group meets next month in Abu Dhabi in the United Arab Emirates.

Some analysts say a decision to increase output next month is unlikely to strengthen supplies to meet peak winter demand season.

"Even if the OPEC ministers decide to raise output in early December, that would likely become effective only in January so by the time the oil gets to the market, the winter season would essentially be over," Shum said.

OPEC officials have also cast doubt on the effect any output hike would have on oil prices, saying the recent rise has been driven by the falling dollar and financial speculation by investment funds, rather than any supply shortage.

In London, January Brent crude futures added 73 cents to US$92.35 a barrel on the ICE Futures exchange.

In other Nymex trading, heating oil futures gained 1.61 cents to US$2.6032 a gallon (3.8 liters) while gasoline futures added 2.06 cents to US$2.3960 a gallon.

Natural gas futures jumped 9.8 cents to US$8.099 per 1,000 cubic feet.