Brent oil price trading firm over $83 amid stronger dollar

5 October 2010 5 October 2010

BonTrade

Brent oil prices open Tuesday’s trading session firm over $83 a barrel although the US dollar found some strength yesterday, which had little impact on oil prices.

In London, Brent crude oil futures for November 2010 delivery was trading at $83.47, 07.40 GMT on the ICE Futures Exchange.

A stronger US dollar means oil producers are going to get paid more per barrel when the price is converted back into their own currencies. It’s a fairly straight trade off that takes the steam out of oil prices, when the dollar goes up, oil prices usually head lower.

A weaker dollar has provided oil prices with momentum in recent weeks, and brent oil futures hit $84 in trading yesterday.

ICE Dollar Index Edges Higher

The oversold ICE Dollar Index found support at the 78 handle and rose to 78.43. Longer term, the Dollar Index has completed a large head and shoulders patter and is looking like it’s heading for a drop further back down to the 70’s level.