Benchmark U.S. crude on Monday rose $1.33 to end at $88.43 per barrel in New York, while Brent crude rose by $1.95 to finish at $103.37 per barrel in London.
The Federal Reserve is considering new moves to boost consumer spending, and analysts are betting Fed Chairman Ben Bernanke will talk about that when he addresses Congress on Tuesday and Wednesday. As consumers spend more and the economy strengthens, demand for oil is likely to rise.
"The market is pricing in some hope that he (Bernanke) will do something tomorrow," said Phil Flynn, an analyst with Price Futures Group.
Last month the Fed extended plans to drive down long-term interest rates. Fed officials are still open to taking more aggressive steps to support the economy, though policymakers disagree over whether now is the right time to do that.
Oil prices rose despite some downbeat reports about the global economy.
— The International Monetary Fund lowered its global growth forecast slightly due to continued financial troubles in Europe and slower expansion in China and India. The IMF expects the world economy to grow by 3.5 percent this year, down from a previous forecast of 3.6 percent.
— China said over the weekend that its economy was cooling off. Chinese Premier Wen Jiabao said the country has not yet entered into a recovery, and that its "economic difficulties may continue for some time." China is the world's second-largest oil consumer, after the U.S. If its economy slows, it's likely its demand for oil will fall as well.
— In the U.S., the Commerce Department reported that Americans cut back on spending at retail business in June. Retail sales have declined for three months in a row. That hasn't happened since the peak of the financial crisis in 2008. The dollar sank after the retail sales report was released, and that pushed the price of oil even higher. Oil, which is traded in dollars, tends to rise as the dollar falls and makes oil cheaper for investors holding foreign money.
At the pump, retail U.S. gasoline prices were relatively flat over the weekend, adding less than a penny from Friday to a national average of $3.396 per gallon, according to AAA, Wright Express and Oil Price Information Service. Gasoline prices have dropped by an average of 54 cents per gallon since topping out close to $4 a gallon in April. They're also 28 cents per gallon cheaper than the same time last year.
In other futures trading, heating oil added 3.95 cents to end at $2.8277 per gallon, while wholesale gasoline rose by 3.86 cents to finish at $2.8547 per gallon. Natural gas fell by 7.3 cents to finish at $2.8010 per 1,000 cubic feet.
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