03/23/2015 12:33 EDT | Updated 05/23/2015 05:59 EDT

Canadian dollar jumps ahead on weaker greenback, stronger oil

The Canadian dollar moved higher Monday amid an uptick in oil prices and a weakening U.S. dollar.

At the close of trading, the loonie was at 79.94 US cents, after rising above 80 cents for the first time in weeks.

After taking a steep plunge last week, crude was in recovery, in part because it is priced in U.S. dollars, which are headed downward. The West Texas Intermediate contract was up 75 cents to $47.32 US a barrel.  Brent crude, the most common international contract, was up 45 cents to $55.77.

The rise came despite comments by a Saudi official over the weekend that the kingdom had increased its crude output by 350,000 barrels a day since February.

An excess of crude on world markets, combined with falling world demand, has led to a huge oversupply of oil worldwide, driving prices from above $100 last summer to below $50 today.

Mohammed al-Madi, Saudi's representative at OPEC, said he did not believe oil would return to its previous highs.  

"$100-$120 - I think it's difficult to reach $120 another time," he said at a weekend conference.

A boom in U.S. production has boosted the supply of oil and it continues despite a pullback in new investment by the sector.

U.S., Canadian production grow

The Baker Hughes Inc. report last Friday showed another 41 U.S. oil rigs have been shut down last week, on top of 750 taken out of production since the beginning of the year.

But that doesn’t mean a net decrease in oil production, which continues to fill storage areas throughout the U.S.

The in daily U.S. production since 2008 is nearly 4.5 million barrels per day. Nor are U.S producers pulling back as OPEC refuses to cut production. Instead, they are finding ways to cut costs so they make money even at low oil prices.

The Canadian Association of Petroleum Producers is projecting Canada’s oil production in 2014 will be 150,000 barrels per day higher than total 2014 production of 3.5 million barrels per day, even after a 30 per cent reduction in capital spending.

But on Monday, the U.S. dollar moved lower, improving the ability of crude buyers around the world to purchase oil.

The greenback is still under pressure from the Fed announcement last week, after the U.S central bank indicated it might move very slowly on raising rates.

Other commodities, including gold and copper, also moved higher.

That helped boost Toronto stocks, which were up 15 points at 14,957, helped by the energy sector.

The Dow fell 12 points to 18,116, the S&P 500 was down four points at 2104 and the Nasdaq fell 15 points at 5020.