WTI oil trading firm over $86, eyes on US Dollar Index

2 December 2010 2 December 2010

BonTrade

WTI oil futures open Thursday’s trading session firm over the $86 mark as higher stock markets give a boost to oil prices, while focus still lies with the strength of the US Dollar Index to gauge short term oil price direction.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $86.65 a barrel, 06.40 GMT this morning on the NYMEX, after closing yesterday’s session 3 percent higher.

Meanwhile, US Dollar Index, which tracks the US dollar’s performance against a basket of six major world currencies, was at 80.715 after falling 0.64 percent in trading, from 81.271.

Oil Prices v Dollar Index

Looking ahead, with markets so fickle at present, it can be difficult to predict how long an oil price rally will last or if it will in fact turn into something more. That said, the US Dollar Index should remain under some mild pressure in trading today.

Yesterday, the US promised to commit more money to IMF in helping out debt burdened Europe, which caused euro to grow against dollar. A weaker US dollar makes crude oil futures more attractive for buyers using foreign currencies.