Crude oil is headed for its biggest weekly increase in more than two months after rising almost 5 percent on Thursday as the dollar slumped, prompting investors to buy commodities.

Crude oil for October delivery was at $121.37 a barrel, up 19 cents on the New York Mercantile Exchange.

On Thursday, the contract surged $5.62, or 4.9 percent to settle at $121.18 a barrel, the biggest increase since June 6. The current prices still lower 18 percent from a record peak at $147.27 on July 11.

Oil is poised for its first weekly gain in two weeks and its largest increase since June 6. Energy and metals futures climbed as the US currency fell the most against the euro in more than a month.

Brent crude oil for October settlement was at $120.38 a barrel, up 22 cents, on London's ICE Futures Europe exchange. It rose $5.80 dollar to $120.16 on Thursday.