02/12/2015 04:34 EST | Updated 04/14/2015 05:59 EDT

Canadian dollar jumps to 80 cents as oil hits $51

The Canadian dollar soared above 80 cents on Thursday as oil prices regained their upward momentum.

The loonie was up by 0.95 of a cent at the close to 80.06 US cents.

West Texas Intermediate oil rose $2.42  to $51.26 US a barrel, up more than four per cent on the day. Brent crude, the most common international contract, rose $3.45 to $59.37.

Oil has been gyrating around the $50 mark for three weeks and analysts are divided on whether it has met its floor or will go lower. The only thing that seems sure is more volatility.

Oil companies around the globe have been cutting back investment, with France’s Total SA reporting its oil and gas production slid two per cent to 2.23 million barrels a day in the fourth quarter.

Total took $6.5 billion in writedowns, mainly against its Canadian oilsands assets and gas fields in the United States.

Lower spending in oil patch

Cenovus and Husky Energy, two of Canada’s biggest players, also are pulling back on investment.

Traders said a weaker U.S. dollar boosted oil purchases Thursday, as it made oil cheaper. However, there also are reports that oil companies are filling up storage tanks and holding oil in ships offshore as they wait out low crude prices.  U.S. crude stockpiles are at record levels.

While the loonie is very sensitive to oil-price movements, currency traders were also reacting to a pickup in other commodity prices, including copper and gold.

The dollar has been under pressure since the Bank of Canada cut rates by 25 basis points in January, with many economists predicting a further rate cut if the economy slows further because of low oil prices.

The Canadian rate outlook contrasts to a more hawkish tone in the U.S., where the Fed seems sit to raise rates this spring.

Today, investors were encouraged by news that all-night negotiations between Russia, Ukraine, France and Germany had produced a peace deal for Ukraine.

There were fears that the conflict would worsen economic troubles in Europe, which is already fragile over the prospect of Greece’s backing away from its debt burden.

Talks yesterday between the Greek finance minister and EU officials ended without a plan of action or even a statement but there was a breakthrough Thursday, with all parties agreeing to “technical discussions” on Athens' anti-austerity demands.

European markets were buoyant on hopes a deal will be reached in time for Greece to avoid a potential exit from the euro and North American stocks also moved outwards.

The TSX was up 78 points to 15229, shrugging off a big shakeup at Bombardier.

The Dow was near record territory, rising 110 points to 17,972 and the S&P 500 rose 19 points to 2088.