WTI oil price weakens to $83, eyes on US dollar v Euro

26 November 2010 26 November 2010

BonTrade

WTI oil futures weakened in early trading this morning to near $83 a barrel as currency markets once again remain the main driver of oil prices, as seen by US dollar strength over the euro.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $83.52 a barrel on the NYMEX, 07.50 GMT this morning.

Meanwhile, the US dollar advanced against the euro and other major world currencies on foreign exchange markets. A stronger US dollar tends to weaken oil prices, as it makes the commodity more expensive to buy with other currencies.

“Trade in currencies, stock markets and commodities are all very thin, but it could also be due to the fact that economic and oil inventories data are already factored in the market.” said David Taylor, an analyst at brokerage CMC Markets.

Both WTI and Brent oil prices are likely to stay rangebound between low and mid $80s as the market keeps a close eye on eurozone debts, recent military confrontations in Korea and inflation fighting measures in China.