WTI oil price hangs at $82, waits for US dollar direction

WTI oil prices opening trading lower around the $82 mark as the US dollar posted its first positive day in over a week, but hold on, the latest US data doesn’t look too impressive.

US Light crude oil futures for September 2010 delivery were trading at $82.22, 08.00 GMT on the NYMEX.

“All our eyes are focused on the non farm report. That could turn the ship around.” said Phillip Streible at futures broker Lind-Waldock in Chicago. However, the short term outlook for the US dollar could be bleak if US data continues to point to a slowing US economy.

The US dollar faces a rough time pulling itself off its current four month lows against a basket of its competitors (the ICE Dollar Index). The ICE Dollar Index, a trade weighted basket of six currencies, fell to its lowest level since April 15th on Monday, at 80.469, but yesterday gained to 80.978.

If the index dips below 79.500, the pace of its decline could quicken, which in turn would boost oil prices and other commodities including gold.