Oil rises over $3

By Fayen Wong

PERTH (Reuters) - Oil rose over $3 to top $80 a barrel on Monday, recouping some of previous session's 10 percent loss, in a relief rally as leaders in the United States and euro zone took steps to pull the banking sector away from a deeper collapse.

Countries from Europe to Australia rushed out plans on Sunday to shore up their banks, trying to stem a crash in markets by pledging to back lending, buy stakes in financial institutions and take other measures to help banks through the worse financial crisis since the 1930s.

U.S. crude for November delivery was up $2.53 at $80.23 a barrel by 11:53 p.m. British time, after rising by as much as $3.07 or about 4 percent at the start of electronic trading.

The contract plunged $8.89 to settle at $77.70 a barrel on Friday, the lowest levels since September 10, 2007.

London Brent crude rose $2.28 to $76.37 a barrel on Monday.

"The announcements from over the weekend would have some positive effects on the markets, even though it's still in very early days at this stage to say if they would put an end to the financial crisis," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.

The U.S. Federal Reserve will consider all options in seeking to stabilise credit markets in a period that may bring negative growth, Dallas Fed President Richard Fisher said on Sunday.

In Europe, government leaders agreed on commitments to provide capital for banks caught short of funds because of frozen money markets and to insure or buy into new debt issues, a summit statement said.