WTI oil trading near $89, US Dollar Index also higher

20 December 2010 20 December 2010

BonTrade

WTI oil futures open Monday’s trading session firm and closing back in on the $89 mark amid a stronger US Dollar Index, which is higher mainly on continuing European debt concerns.

Latest WTI Oil Price

US Light crude oil futures for February 2011 delivery was trading at $88.65 a barrel, 07.20 GMT this morning on the NYMEX.

Meanwhile, the US Dollar Index, which tracks the dollar against six major world currencies, climbed for a second day on speculation an agreement reached at a European Union summit last week won’t stem the contagion.

A higher US dollar normally weighs on WTI and Brent oil prices, however other factors are starting to draw more attention for investors and traders alike.

“There is concern the European debt crisis won’t be contained anytime soon, supporting the US dollar across the board and making it hard to take riskier positions” said Hideki Hayashi, a global economist at Mizuho Securities, Tokyo.

Bad Weather Lifts Oil Prices Further

Oil prices will be seeing support this week as forecasts for more bad weather in Europe and the US Northeast looked to boost heating fuel demand.

“Oil prices are going back up because of the really bad weather in the United States and Europe.” said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.