NEW YORK (Dow Jones)--Crude futures approached $80 a barrel for the first time in a year Monday as growing optimism about the economy boosted oil and equities at the expense of the dollar.

But lingering concerns about surplus oil and fuel inventories prevented oil prices from hitting another milestone.

Light, sweet crude for November delivery settled $1.08, or 1.4%, higher at $79.61 a barrel on the New York Mercantile Exchange, rising for an eighth consecutive session. The November contract expires Tuesday, and trading was heaviest in December futures, which managed to reach $80.05 a barrel shortly before settling at $79.96 a barrel.

Brent crude on the ICE futures exchange settled at $77.77 a barrel, up 78 cents, or 1%.

Oil futures have soared up and out of the $65 to $75 a barrel trading range that had served as the market's boundaries for most of the last four months, carried by a weaker dollar and surging equities.

Investors encouraged by signs that major economies are pulling out of their downturn have sold the dollar and bought equities and commodities that stand to benefit from a recovery. On Monday, the dollar was near its 2009 low at $1.4949 against the euro, while the Dow Jones Industrial Average rose 1.2% to 10118, a one-year high.

"Trading is more based on the dollar, it's more based on this optimistic view that if commodities and equities keep moving higher, consumption ... is bound to go with it," Matt Zeman, president of trading at LaSalle Futures Group in Chicago, said.

The dollar has gradually weakened for months, and oil hasn't always risen at quite the same pace. A significant portion of the market is skeptical that even an uptick in demand tied to the economic recovery will be enough to diminish massive surpluses of oil and fuel built up during the worst of the downturn.

The latest U.S. inventory data is due out Wednesday from the Department of Energy, and analysts are expecting oil stockpiles to increase by 1.1 million barrels, according to a Dow Jones Newswires survey. Gasoline inventories are seen falling 1.6 million barrels, while stocks of distillate, including heating oil and diesel, are expected to drop 1 million barrels.

Refineries are seen increasing their operating rate by 0.2 percentage point to 81.1% of capacity, which would still be one of the lowest utilization rates ever for this time of year.

But inventory data is unlikely to stand in the way of $80 a barrel crude if the dollar keeps weakening, said Phil Flynn, an analyst with PFGBest in Chicago.

"This is not a demand-driven rally," Flynn said. "If demand was so strong, why aren't those inventories falling dramatically? Why are refiners slowing down?"

Front-month November reformulated gasoline blendstock, or RBOB, settled 79 points, or 0.4%, higher at $1.9872 a gallon. November heating oil settled 2.25 cents, or 1.1%, higher at $2.0522 a gallon.

More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:

Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close

-By Brian Baskin, Dow Jones Newswires; 212-416-2453;