WTI oil price nears $83 on weaker ICE Dollar Index

WTI oil futures open the week’s trading session higher and near the $83 mark as the US dollar lost ground in early foreign exchange trading, as seen by movements in the ICE Dollar Index.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $82.67, 07.45 GMT this morning onthe NYMEX.

Meanwhile, the ICE Dollar Index, which tracks US dollar performance against a basket of six major major currencies including the euro, was down 0.46 percent at 78.143.

The euro opened higher this morning after Ireland agreed an international bailout to tackle its banking and budget crisis, helping remove a major stumbling block that had plagued the single currency for weeks.

Oil prices are heavily connected to the value of the US dollar and this morning’s euro strength will see oil and other commodities including gold and silver trade higher, in the short term at least.

However, the eurozone continues to have issues in countries including Portugal and Spain, which could well test the euro’s strength, in turn affecting crude oil prices.

Next Bailout – Portugal?

The EU’s bailout of Ireland may give short term relief to markets, but despite eurozone hopes it may not prevent the markets from pushing Portugal to look for EU and IMF assistance as well.

“In the short term this should be positive for risk appetite. I don’t think this does anything to take Portugal and possibly Spain out of the firing line.” said Peter Chatwell, rate strategist at Credit Agricole CIB in London.