WTI oil trading back at $81 as Dollar Index takes off

22 November 2010 22 November 2010

BonTrade

WTI oil prices have had a mixed start to the week and are currently back near $81 a barrel as investors head back to the US dollar as a safe haven, as seen by today’s ICE Dollar Index strength.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $81.05, 16.45 GMT today on the NYMEX, after climbing above $83 in early morning trading.

Meanwhile, the ICE Dollar Index, which tracks the US dollar against a trade weighted basket of six major world currencies was at 78.854, over one percent higher than 78.143 recorded earlier today.

A stronger US dollar typically sends oil futures and commodities prices lower and stops investors appetite for riskier assets, because it makes crude oil futures more expensive for buyers in other currencies.

Eurozone Debt is this Week’s Focus

Concerns about eurozone sovereign debt issues engulfing another victim, possibly Portugal or Spain sent many investors fleeing the euro.

“For this week, it will be important to see if the rescue plan can stop a chain of risk that may spread into other eurozone countries facing financial deterioration.” Mizuho Corporate Bank said in its daily commodities research note.