Brent oil price may test $80 today on lower US dollar

Brent oil prices maybe ready to trade back through the $80 mark today as a weakening US dollar pushes commodity prices for Brent and Light crude oil futures higher.

In London, Brent crude oil futures for November 2010 delivery was trading at $79.20, 08.00 GMT on the ICE Futures Exchange after yesterday’s closing price of $78.80.

US Dollar Index Heads Lower

The US Dollar Index, a measure of the US dollar against a basket of six major currencies, pushed as low as 78.828 early in currency market trading this morning, the lowest point since early February 2010. It had closed at 78.956 yesterday.

The dollar continues to lose ground on the foreign exchange market as speculation of further quantitative easing (money printing) by the US Federal Reserve has investors selling the currency.

Meanwhile, Brent and WTI oil prices were boosted on the latest data that US crude oil stocks fell by 2.4 million barrels, the API said, eight times as much as the 300,000 barrel decline forecast in a Reuters survey of analysts.

Brent Oil Futures to Test $80 Soon?

Brent oil futures continue to consolidate last week’s gains, as high US inventory levels prevent oil from surging in step with stock markets.

However, continued gains in wider financial markets and a weaker US dollar may enable Brent oil futures to break above $80 in the coming days. Our tip is too keep an eye on the ICE Dollar Index for clues of future oil price direction.