LONDON, ENGLAND (AFP) - Oil prices rose sharply on Monday as a weaker dollar helped boost demand for the commodity, analysts said.

New York's main contract, light sweet crude for January delivery, advanced 97 cents to US$78.44 a barrel. The December contract had expired at US$76.72 on Friday.

On Monday in London, Brent North Sea crude for January delivery climbed US$1.15 to US$78.35 a barrel.

"We are seeing the US dollar weaken against the euro and investors continue to see oil at this low end of the trading range to be a buy opportunity," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"Investors see the US dollar to be on a downward trend for the long term and so there are continued inflows into oil and other commodities," he said.

A weaker greenback makes crude oil and other commodities, such as gold, cheaper for holders of other currencies, driving demand.

Gold futures soared to a record US$1,167.88 an ounce on Monday on the London Bullion Market as dealers moved into the commodity viewed as a safe-haven amid the threat of higher inflation.

Analyst Shum said he expected oil to trade between the "high 70s and the low 80s" US dollar range until the end of the year.

"The oil market has shown that it's going to be very difficult to sustain pricing above 80 dollars because of the weak fundamentals and the uncertaintyto sustain the global economic recovery," he added.

Crude futures were likely to stay under US$80because of high oil inventories in the United States, the world's biggest energy-consuming nation, analysts said.

New York crude prices last Wednesday breached 80 dollars a barrel after government data showed crude reserves in the United States fell 900,000 barrels in the week ending November 13.

However levels remain relatively high with demand struggling to recover following the financial crisis.

OPEC president Jose Maria Botelho de Vasconcelos has signalled that US$75-80 oil is an adequate level to allow for a global economic recovery.

The Organization of Petroleum Exporting Countries (OPEC), which pumps about 40 percent of the world's oil, holds its next meeting to discuss output levels in December.