Oil jumps $5, supported by the decline in the dollar and tight supplies

Oil prices jumped more than five dollars on Monday, boosted by a weak dollar and expectations that the US Federal Reserve will not raise interest rates by a full percentage point at its next meeting to fight inflation.

The global benchmark Brent crude contracts for September delivery ended the trading session up $5.11, or 5.1 percent, to settle at $106.27 a barrel, after rising 2.1 percent on Friday.

And US benchmark West Texas Intermediate crude contracts for August delivery rose $5.01, or 5.1 percent, to close at $102.60 a barrel after recording an increase of 1.9 percent in the previous session.

Two Federal Reserve officials indicated on Friday that the US central bank would raise interest rates by only 75 basis points at its July 26-27 meeting. Earlier reports that the Fed was considering an increase of 100 basis points had sent markets lower late last week.

On Monday, the dollar index fell from its highest level in several years, supporting commodity prices. A weak dollar makes green-denominated goods less expensive for holders of other currencies.

Last week, Brent and US crude posted their biggest weekly losses in about a month last week.