Oil rises over 2 pct on weaker dollar

May 31, 2011 - 10:59 AM

NEW YORK (AP) — Oil rises over 2 percent after a sharp drop in the dollar and reports of pipeline problems in the Midwest.

Benchmark crude added $2.22, or 2.2 percent, at $102.81 per barrel Tuesday on the New York Mercantile Exchange.

The dollar lost ground to the euro earlier in the day as the European Union discussed whether to send more financial aid to help Greece's economy. Oil is priced in dollars. It tends to rise as the greenback weakens and makes crude cheaper for investors holding foreign currency.

TransCanada temporarily shut down the Keystone Pipeline after noticing a minor spill at a pump station in Kansas. The pipeline delivers a half million barrels of oil per day to the U.S. from Alberta.

The national average for gas fell to $3.78 per gallon.