Brent oil futures trading at $91, US dollar remains firm

15 December 2010 15 December 2010

BonTrade

Brent oil futures open Wednesday’s trading session near $91 as both Brent and WTI oil prices remain at the mercy of the US dollar, which remains firm today in currency market trading.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $90.95 a barrel, 07.45 GMT on the ICE Futures Exchange.

Meanwhile, the ICE Dollar Index, which tracks the US dollar against those of six major world currencies, climbed to 79.810 from 79.248 on Tuesday for a second day running.

The US dollar has gained about 5% against the euro since the US Fed’s last meeting on 3rd November. The ICE Dollar Index is also up 5% (no surprise there).

Many Fed critics complained that QE2, the program to purchase $600 billion in US bonds (or money printing), would create artificial demand for Treasuries in order to keep their prices up and rates low.

That could further devalue the US dollar, which would be bad news even though a weaker greenback could benefit large US companies that do a big chunk of business abroad. That’s because there are larger concerns about how a weaker US dollar could lift already high oil prices and add to inflation pressures in the US.