Crude oil futures extended sharp gains on Monday, jumping to a three-week high amid optimism that euro zone policy makers will unveil fresh measures to tackle the region’s ongoing debt crisis, boosting the appeal of riskier assets.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at USD85.88 a barrel during U.S. morning trade, surging 3.48%.

It earlier rose by as much as 3.6% to trade at USD85.97 a barrel, the highest price since September 21.

German Chancellor Angela Merkel and French President Nicolas Sarkozy

said Sunday in Berlin that they will present a "comprehensive" package of new measures to tackle the region’s debt crisis, ahead of a G20 summit early next month.

Also boosting sentiment, Greek Finance Minister Evangelos Venizelos said earlier that officials from the International Monetary Fund, European Commission and European Central Bank, were set to conclude talks with Greek officials and release a statement later Monday or Tuesday.

The euro rallied nearly 2% against the greenback on the news, while the dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was down 1.45% to trade at an eight-day low of 77.92.

A weaker dollar makes U.S. commodities cheaper for importers holding other currencies.

German lender Commerzbank said in a report earlier that it does not view the recent jump in prices ‘as either appropriate or sufficient to justify a sustained price recovery.’

The lender added that crude oil will probably trade between USD80 and USD90 for the near term, citing uncertainty over the global economic outlook and its impact on oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery jumped 2.45% to trade at USD106.70 a barrel, up USD20.82 a barrel on its U.S. counterpart.

Brent prices were lifted after Nigeria’s oil unions began a three-day strike over growing insecurity in the oil-rich Niger Delta.

Nigeria produces approximately 1.9 million barrels of oil per day, making it Africa’s largest oil producer, according to the U.S. Energy Information Administration.