WTI oil price nears $82 amid surging ICE Dollar Index

24 November 2010 24 November 2010

BonTrade

WTI oil futures open today’s trading session higher and closing back in on the $82 mark amid a surging US dollar, as seen by upward movements on the ICE Dollar Index.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $81.85 a barrel, 07.10 GMT this morning on the NYMEX.

Meanwhile, the ICE Dollar Index, which measures the US dollar against a basket of six major world currencies was up 1.3% to 79.755 and may soon test the 80 level.

Earlier in November the ICE Dollar Index looked weak, however the latest developments in Europe and Korea have sent investors piling back into the currency, still seen as a safe haven and a hedge against a weaker euro currency.

It seems for now at least the US dollar is going to remain strong, affecting both WTI and Brent oil prices as well as a range of other commodities, all traded in dollars.

Traders Covering Positions?

WTI oil prices turned positive this morning on expectations that US crude oil stockpiles fell last week and on cautious short covering ahead of the US Thanksgiving holiday, which will see US markets closed tomorrow.

Oil prices maybe rising as traders unwind their bets on lower prices, however trading volumes will be lighter over the remainder of this week.

“This oil rally seems to have come exclusively on short covering, because the two major influences on oil prices, the US dollar and stock markets, both moved in ways that would have suggested a steep move lower in oil.” commented Peter Beutel of Cameron Hanover.