WTI oil trading near $76 as US Dollar Index hits 82.50

12 August 2010 12 August 2010

BonTrade

WTI oil futures are trading over two percent lower again today as the US Dollar Index hits 82.50 levels, up around three percent from Monday’s rate.

US Light crude oil futures for September 2010 delivery was trading at $76.40 a barrel, 18.45 GMT on the NYMEX.

The ICE Dollar Index, which tracks the dollar against a basket of other main currencies has shot higher as traders move investments from traditional markets (equities) into what is currently perceived as safer havens, such as the US dollar, the Swiss franc and gold.

The ICE Dollar Index rose 0.4 percent to 82.612, after hitting a session peak of 82.786, its highest since last month.

“It seems like the negative correlation between bad news and the US dollar is back,” said Brendan McGrath at Custom House.

Both WTI and Brent oil prices have fallen over seven percent in the past week as data and meetings show signs of slower growth in the US, China and the UK.

However, of the seven percent drop in oil prices, consider that around half of that fall would be directly related to the US dollar surge this week, and the other half as a direct result in oil futures tracking stock markets lower.