WTI oil price heads lower on stock markets, US dollar

20 August 2010 20 August 2010

BonTrade

WTI oil futures are set to end the week lower, heading down in light trading to below $75 as stock markets fall lower and the US dollar continues to hold firm.

US Light crude oil futures for September 2010 delivery were trading at $74.85, 07.45 GMT on the NYMEX, while the ICE Dollar Index, which tracks the dollar against a trade weighted basket of currencies, was at 82.437 and holding firm.

European stocks are expected to open lower Friday, following weakness in the US and Asia after another round of disappointing US data reignited fears about the pace of the global recovery.

With no major data releases due on either side of the Atlantic, stock markets and oil prices are likely to struggle for direction today. With the prospect of thin trading volumes leading to even more volatility, the temptation could well be to maintain the defensive stance.

WTI oil prices rebounded on Tuesday but the rally was short lived after a US report showed US crude inventories fell less than expected.