Oil prices rose above $80 per barrel today as the dollar weakened against a basket of other currencies and after an industry report showed U.S. crude oil stocks fell steeply last week.

The dollar has fallen steadily for most of this year and hit a 15-month low this week, helping drive commodities higher as investors have sought hard assets to hedge against the depreciating currency.

Oil is priced in dollars on world markets and energy prices often move in the opposite direction to the U.S. currency.

"The market has picked up as the dollar has retrenched," said Harry Tchilinguirian, oil analyst at BNP Paribas.

"With oil trading (rightfully or wrongfully) inversely with the dollar and positively with equities, buying interest in oil, like other commodities has risen," BNP said in a statement.

U.S. light crude oil futures for December delivery rose more than $1 per barrel to a high of $80.23 before settling back to trade around $80.06.

London Brent crude gained $1.03 to $80.00.

BNP Paribas raised its average price forecast for U.S. crude in 2010 to $81 a barrel from $78 and also increased its estimate of the average price in the fourth quarter of 2009 to $77 per barrel from $66.