WTI oil price moves lower, awaits Tuesday’s US market open

5 July 2010 5 July 2010

BonTrade

WTI Light oil prices opened the week trading higher but soon lost gains, moving closer to the $70 mark as investors turn cautious with many awaiting Tuesday’s US market open.

US Light crude oil futures for August 2010 delivery was at $71.85 a barrel at 15.30 GMT as the US takes a holiday for July 4th celebrations.

“Obviously, speculative investors are taking their profits because of worries regarding an economic slowdown in the USA and China,” said a report from Commerzbank in Frankfurt.

“The balance of crude oil price risks appears skewed towards the downside” because of “negative demand shocks from a sluggish economic recovery,” ANZ bank said in a report.

As risk aversion grows in the market, so traders are likely to move their assets away from buying oil and into safe havens such as the US dollar, however the dollar has also been taken a few pegs down as the US Dollar Index shows.

The ICE Dollar Index, which tracks the performance of the US dollar against a trade weighted basket of currencies, rose to 84.480 from 84.478, although is off recent highs around the 89 mark.

Some currency traders said the US dollar could fall further if US economic data and stock market moves are weak later this week. A weaker US dollar tends to have a positive effect on oil prices.