WTI oil trading up near $89, currency market driving prices

WTI oil futures open Tuesday’s trading session back near $89 a barrel as crude prices once again take cues from forces driving the currency market, especially in relation to the euro and US dollar rates.

Latest WTI Oil Price

US Light crude oil futures for October 2011 delivery was trading at $89.06 a barrel, 05.45 GMT this morning in electronic trading on the NYMEX. The US oil contract closed yesterday’s trading session up 1.9 percent at $88.80.

The Currency Market and Oil Prices

Traders and investors in crude oil and other markets are worried that the grim debt situation in Europe could undercut any recovery across global markets. This is playing out with the US dollar seeing gains against other major currencies including the euro and oil prices are being restrained.

As the EU debt crisis threatens the integrity of Europe the US dollar has risen sharply since the end of August. The ICE Dollar Index, which tracks the US dollar against six major world currencies was this morning at 77.244.

“Since the US dollar has strengthened, people are not rushing to buy even though prices have fallen from the record high.” said a Singapore based dealer.

Investors are now going to be watching a meeting between the US Treasury Secretary Geithner and euro zone finance ministers on Friday to discuss risks posed by European debt contagion.

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WTI oil trading up near $89, currency market driving prices