Brent oil price trading firm over $85 on weaker US dollar

19 November 2010 19 November 2010

BonTrade

Brent oil prices open Friday’s trading session firm over $85 a barrel as a weaker US dollar pushes oil, gold and other commodity prices back into positive ground.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $85.30 a barrel, 07.30 GMT this morning on the ICE Futures Exchange.

The ICE Dollar Index, which measures the US dollar against a basket of six major world currencies, fell to 78.589.

Focus Back on China

Oil prices may see some resistance over possible price controls for energy products in China, aimed at slowing the country’s soaring inflation. However, the Chinese government offered few specifics and did not say that price caps would be imposed on any specific products.

Possible tightening of monetary policy in China, may lead to a drop in crude oil demand.

Euro Bailout Talks Fuel Oil Prices

Oil prices erased recent losses yesterday as the US dollar dropped against the euro, fueling the appeal of commodities including oil and gold as an alternative investment. Brent oil prices ended trading over two percent higher yesterday after Ireland’s central bank governor said he expects the country to seek help.

“Market direction is still uncertain even though the sovereign debt risk in Ireland might be helped by a bailout. It’s mostly being driven by financial considerations.” said Tetsu Emori, a commodity fund manager at Astmax in Tokyo.

Wait and See What the Weekend Brings

Both the Chinese rate hike rumours and the Ireland bailout talks may well play out over the weekend, when the futures market is closed. Keeping an eye on these two developments may well give indications of oil price direction early next week.