Crude oil prices hit 2 year highs, traders eyeing $100 oil

Brent and WTI oil prices open another see-saw trading week hovering at 2 year highs as the US dollar once again shows the way forward for short term oil price direction.

At this late stage in 2010, the outlook for the price of oil to reach the psychological level of $100 per barrel is now in focus with investors. Many banks have recently raised their forecasts for oil prices over the next two years, with Goldman Sachs forecasting that oil futures will rise to $100 in 2011.

Traders and investors are already looking to the next benchmark of post $100 per barrel oil prices for 2011.

December OPEC Meeting in Focus

Meanwhile, the market is focusing on the upcoming meeting of OPEC on 11th December in Ecuador. OPEC member countries control over 40 percent of global oil output and decisions made there can have an impact oil prices.

Saudi Arabia’s Oil Minister Al Naimi said at OPEC’s last meeting, on 14th October that market conditions were ideal as oil supply was meeting good demand from Asia. Saudi Arabia has implemented oil production cuts announced in 2008 to support crude prices.

Weaker US Dollar Supporting Oil Prices

The US dollar headed to its biggest drop in six weeks on Friday as US unemployment rates rose to 9.8 percent, suggesting the US Fed may pump more money into the financial system to support the American economy.

Traders know that a weaker dollar supports oil prices, which are priced in US dollars. This means that buyers who use other currencies can get more for their money when the US dollar grows weaker.