Brent oil price trades back under $98 on higher US dollar

20 January 2011 20 January 2011

BonTrade

Brent oil futures open Thursday’s trading session back under $98 a barrel as the US dollar continues to dictate short term oil prices, as seen by movements on the ICE Dollar Index.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2011 delivery was trading at $97.62 a barrel, 08.25 GMT this morning on the ICE Futures Exchange.

Meanwhile, the ICE US Dollar Index, which tracks the US dollar against six major world currencies was at 78.92, after clawing back yesterday’s opening losses.

Tight Oil Supplies in Europe

Brent oil futures fell just below $98 a barrel on a weaker euro although tight supplies of North Sea crude cargoes provided some support for the Brent contract. Crude oil traders said that Hetco, a trading firm, has control of thirty percent of February cargoes, giving it more influence over the spot market.

“An ongoing upbeat view of China and improving conditions in developed markets should see all major commodities register substantial gains in 2011.” said Mark Pervan, head of commodity research at ANZ.

Meanwhile, Goldman Sachs commodities trading risk has hit a near seven year low, suggesting the Wall Street giant has become less aggressive in taking advantage of surging oil prices.