WTI oil price trading near $92 amid higher US Dollar Index

3 January 2011 3 January 2011

BonTrade

WTI oil prices kick off this week’s trading session higher, near $92 a barrel amid a stronger US dollar, as seen by strength in the US Dollar Index.

Latest WTI Oil Price

US Light crude oil futures for Feruary 2011 delivery was trading at $91.80 a barrel, 07.30 GMT this morning on the ICE Futures Exchange.

Meanwhile, the ICE US Dollar Index, which tracks the US dollar against six major world currencies increased 0.44 percent to 79.32 after touched a high of 79.40 after opening at 79.09.

Oil as a Hedge Against Inflation?

“Investors are using oil or other commodities futures or options to hedge against inflation, a weaker US dollar, stronger precious metals prices or an economic recovery. In 2010, investors just bought oil, knowing that buying would push oil prices higher and it seems likely to continue in 2011.” Cameron Hanover said.

Analysts expect WTI oil futures to make a run at the $100 mark early in 2011, as Western economies recover and China’s economy remains strong.

“Ultimately, this market is going as high as $120 to $130 by July, and there are more and more people coming out and saying that. It’s inevitable.” said Mark Waggoner, president of Excel Futures.