WTI oil price trading down 3 percent on firm US dollar Index

1 June 2010 1 June 2010

BonTrade

WTI oil prices are trading down around 3 percent on Tuesday as the Euro sinks to 4 year lows against the US dollar and the US Dollar Index hits 87.34, which is it’s highest level since March 2009.

US WTI Light crude oil futures for July delivery was down $1.51 at $72.17 a barrel at late afternoon Singapore time on the NYMEX.

Oil traders often look to equities as a barometer of overall investor sentiment, and dollar-based commodities such as oil become more expensive for investors holding the European currency when the dollar gains.

Floor trading on NYEX was closed yesterday for the Memorial Day holiday and yesterday’s electronic trades will be booked today for settlement purposes.

Oil prices also dropped as stock markets fell around the world with Europe’s Stoxx 600 Index declined 1.7 percent to 240.87 at 11:07am in London.

The Dollar Index rose around 1 percent on the day to 87.473, its highest level since March 2009.

“Geopolitical concerns in the Middle East and Korea are to the fore, supporting the dollar, as well as debt problems in the Eurozone,” said Tom Levinson, FX strategist at ING.