Brent oil trading near $91 amid firm ICE Dollar Index

Brent oil prices look set to end the week’s trading session near or over $91 a barrel as positive markets push crude oil to highs not seen since 2008, while US dollar strength is unable to cap gains.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $90.76 a barrel, 07.45 GMT this morning on the ICE Futures Exchange.

Meanwhile, the ICE Dollar Index, which tracks US dollar strength against six other major world currenices was firm at 80.185.

WTI Oil Price to Hit $90 Regardless of US Dollar?

“Improved US economic climate that has spurred this week’s upside acceleration in the equities is an important driver of higher oil prices. We continue to see an energy complex capable of advancing further to above the $90 mark even without the assistance of a weakening US dollar.” said Jim Ritterbusch at Ritterbusch & Associates.

“While financial risks remain, we feel that the increasing synchronicity of global economic growth provides a resurgent force to physical commodity demand.” said JP Morgan analysts.

Back to 2008 Trading Patterns?

Meanwhile, rising oil demand from emerging and developed economies is also changing the price structure of crude futures markets. ICE Brent contracts for earliest delivery or settlement are now trading at a premium to later contracts for the first time since May 2008, according to Barclays Capital.

The new pricing structure developing, known as “backwardation”, is replacing the prevalent so called “contango” of the past two years (2009 and 2010) where earlier Brent oil contracts traded at a discount to future Brent oil contracts.

Contangos are a sign of oversupplied markets, while the turn to backwardation signals an under supplied market (think crude oil demand).