Brent oil trading firm at $98 a barrel on weaker US dollar

24 January 2011 24 January 2011

BonTrade

Brent oil prices open Monday’s trading session higher, back over $98 a barrel as the US dollar continues to be one of the main drivers of commodity prices, including oil futures.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2011 delivery was trading at $98.12 a barrel, 06.30 GMT this morning on the ICE Futures Exchange.

Meanwhile, the ICE US Dollar Index, which tracks the US dollar against six major world currencies, was up 0.1 percent at 78.295 points. A weaker US dollar tends to add fuel to higher oil prices, as oil gets cheaper for buyers trading in other currencies.

$100 Oil – Just Around the Corner?

Oil prices first hit $100 in January 2008 and peaked at $147 in July 2008. ICE Brent’s premium to it’s US counterpart, WTI crude reached $8.59 intraday on Friday, its highest since February 2009, mainly on tighter North Sea crude oil supplies and strong emerging market demand.

Brent oil prices could tip over the $100 this week.

“We don’t see any tightness in the oil market at the moment.” said Peter Beutel, president of US trading advisory firm Cameron Hanover in a note late Friday.

“Although the Western economies have been slowing, oil demand from other developing nations is still very strong so I wouldn’t be at all surprised if we do see some furthering strengthening to oil prices.” said Justin Urquhart Stewart of Seven Investment Management.