WTI oil futures open Tuesday’s trading session holding near $107 a barrel as oil prices had some support from a weaker US dollar, whilst analysts warn that oil prices would rocked if Iran was to cut off oil shipments from the Persian Gulf.
Latest WTI Oil Price
US Light crude oil futures for May 2012 delivery was trading at $106.76 a barrel, 05.56 GMT today in electronic trading on the NYMEX.
The US oil contract closed off Monday’s trading session at $107.13 a barrel, or 0.2 percent higher.
Weaker US Dollar
The ICE US Dollar Index dropped from the boundaries of the key level at 80.00 after Federal Reserve Chairman Ben S. Bernanke’s speech yesterday afternoon regarding the US labour market and the American economy as a whole were more than enough to drag the US dollar to fresh year lows and revive investors’ hopes of a third round of quantitative easing.
In trading this morning, the ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 79.130, from the session open of 79.576.
Oil prices advanced after Bernanke’s comments that accommodative monetary policy is needed to lower unemployment, making commodities a more attractive investment.
Oil Crisis Risk
Meanwhile, IHS Global Insight’s chief economist Nariman Behravesh warned that the risk of an oil crisis is now the biggest danger facing the world’s economic growth, replacing the now diminished concern about a European financial collapse.
IHS estimates that European Brent oil prices will probably hover close to $120 a barrel this year and next, which poses no risk to growth since it’s actually lower than Wednesday’s price just over $124.
But if there’s a blockade of the Strait of Hormuz, Brent oil prices would shoot up to about $240 for a few months and US WTI oil futures would not be far behind.
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WTI oil price holds near $107, supported by a weaker US dollar, Iran
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