Oil climbs $3 after dive

By Fayen Wong

PERTH (Reuters) - Oil climbed more than $3 on Monday, recouping part of Friday's 10 percent dive as European leaders took bolder steps to pull the banking sector out of crisis.

Countries from Europe to Australia rushed out plans on Sunday to shore up their banks, trying to stem a crash in markets, while investment bank Goldman Sachs said the financial crisis had already done more damage than it expected to commodity demand, forcing it to dramatically cut price targets.

U.S. crude for November delivery rose $2.95 to $80.65 a barrel by 0619 GMT amid cautious enthusiasm over the latest efforts to stave off a global recession. News of capital raising by Barclays Capital and Royal Bank of Scotland also helped.

Prices plunged nearly $9 on Friday to their lowest since September 10, 2007, having dumped 17 percent over last week, the biggest one-week loss since the 2003 war in Iraq.

London Brent crude rose $2.36 to $76.45 a barrel.

"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.

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, the latest in a series of bold measures.

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.