WTI oil price trades over $81 as US dollar sinks lower

3 August 2010 3 August 2010

BonTrade

WTI oil is trading over $81 a barrel early on Tuesday as oil prices made three percent gains yesterday and the US dollar continued to sink lower against other major currencies.

US Light crude oil futures for September 2010 delivery was at $81.50, 07.45 GMT on the NYMEX.

The US dollar hovered near a 3 month low against most major currencies and the ICE Dollar Index stood at 80.96 late Monday and a break below 80.723 would put it below its 200 day moving average for the first time since January 2010.

Traders said exporters have been lowering the levels at which they are willing to sell the US dollar on views that weakness in the US currency is likely to persist, which would only add to oil price gains.

Oil prices surged along with other commodities yesterday after July manufacturing indexes in the US, Europe and the UK all came in better than expected.

The reports boosted confidence that economic growth continues, after several weeks of mixed indicators. Similar optimism about future commodity demand caused crude oil prices to double back in 2009.