Brent oil trading firm near $78 on weaker US dollar

Brent oil is trading firm near the $78 mark today with prices receiving a small lift as the US dollar showed signs of becoming weaker.

In London, Brent crude oil futures for September 2010 delivery was trading at $77.61, 16.30 GMT on the ICE Futures Exchange.

The ICE Dollar Index, which tracks the US dollar against a trade weighted basket of currencies, was at 82.314, from the 82.475 close on Friday.

The US economy embarks upon a relatively heavy data week, with new home sales, the Case-Schiller house prices and consumer confidence on Tuesday, durable goods and the Fed’s Beige Book on Wednesday.

Oil prices in the last few hours gained as much as 0.4 percent as equities advanced after the US Commerce Department said purchases climbed 24 percent in May to an annual pace of 330,000.

Meanwhile, Jerome Booth, head of research at Ashmore Investment Management in London, said investors “should never equate the dollar with risk-free.” Booth added that the argument that the US Treasury market is the most liquid in the world may not hold true if a few central banks started selling.

The US dollar is lower for the third trading day against the euro, boosting the appeal of commodities including Brent and Light oil futures as an alternative investment.