WTI oil price trading back at $88, US dollar makes gains

8 January 2011 8 January 2011

BonTrade

WTI oil prices end Friday’s session at $88 a barrel as the first week’s trading of 2011 sees the US dollar make gains, capping the appeal of oil futures and other commodities as alternative investments.

WTI Oil Futures – Closing Price

US Light crude oil futures for February 2011 delivery ended the week at $88.03 a barrel on the NYMEX, over $3 a barrel lower than last week’s closing price of $91.38.

Meanwhile, the US dollar index gained nearly 3 percent this week (as seen by movements higher on the ICE Dollar Index).

Interestingly, Brent oil futures did not suffer the same correction lower.

Short Term Oil Price Direction Mixed

WTI oil prices have fallen from a 27 month high of $92.58 hit on Monday and are down for a second week in a row. A year ago, front month crude settled at $82.66.

Short term price forecasts for oil will remain uncertain and heavily dependent on the US dollar for any clear direction higher, or lower.