Oil prices rallied on Monday, boosted by positive manufacturing data from China, the world's second biggest energy consuming nation after the United States.

Better-than-expected US manufacturing and other figures released during late trade also helped ease concerns about the pace of the global recovery.

New York's main contract, light sweet crude for delivery in December jumped 1.30 dollars to 78.30 dollars a barrel.

Brent North Sea crude for December was 1.54 dollars higher at 76.74 dollars in late London trading.

"Robust economic data from China is lending support today," said Commerzbank analyst Carsten Fritsch.

The HSBC China Manufacturing PMI, or purchasing managers index, rose to an 18-month high of 55.4 in October from 55.0 in September.

A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.

A separate official Chinese PMI, compiled by the National Bureau of Statistics, showed manufacturing activity rose to 55.2 in October -- the highest since May 2008 -- from 54.3 in September.

Oil prices also found fresh support by a fresh drop in the value of the dollar, analysts said.

The US unit fell against the euro on Monday amid fresh worries about the US financial sector following the bankruptcy of US bank CIT Group over the weekend, traders said.

The weaker dollar makes dollar-priced oil cheaper for buyers using stronger currencies and therefore tends to stimulate oil demand and prices.

Traders meanwhile assessed the global economic outlook in the wake of the CIT bankruptcy.

While data released last Thursday showed the United States has emerged from a prolonged recession, consumer spending, which accounts for two-thirds of the nation's economic activity, fell in September.

"I think the reality is that the economic signals out there have been mixed," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"Last week there was positive US (gross domestic product) but consumer spending was quite negative."

Shum added that "even though there are signs of economic recovery, the recovery appears to be on a shaky ground and also somewhat uncertain."

The US economy grew at a seasonally adjusted 3.5 percent in the September quarter, the fastest growth in two years as the country emerged from a brutal recession.

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