Brent oil price ends week near $94 on higher US dollar

8 January 2011 8 January 2011

BonTrade

Brent oil prices end the week’s trading session under $94 a barrel as the US dollar regained strength, as seen by firm movements higher on the ICE Dollar Index.

Brent Oil Futures – Closing Price

Brent crude oil futures for February 2011 delivery ended the week’s trading session at $93.61 a barrel on the ICE Futures Exchange, which is only $0.98 lower than the contract’s close last week at $94.59.

However, The ICE Dollar Index, which tracks the US dollar against six major world currencies traded higher everyday this week and is up an impressive 2.7 percent, closing at 81.14, from 79.31 a week earlier.

Stronger US Dollar Holding Oil Prices

Both Brent and WTI oil futures are holding onto recent gains seen last month, however a stronger US dollar is holding the price of oil and other commodities from rising higher, at least in the short term.

Recent data out of the US may suggest that a recovery maybe taking hold, however the general outlook in the US remains clouded with high uncertainty and the recent dollar strength maybe short lived.

Oil futures and other commodities are priced in US dollars, hence a stronger dollar makes it more expensive to buy for investors who are using other currencies.