WTI oil trading back at $96 after US Bernanke comments

WTI oil futures open Friday’s trading session back around $96 a barrel after comments from US Fed chairman Ben Bernanke slowed expectations for a near term continuation of a US economic stimulus program, sending the US dollar higher.

Latest WTI Oil Price

US Light crude oil futures for August 2011 delivery was trading at $95.81 a barrel, 06.15 GMT this morning in electronic trading on the NYMEX.

No Further Action – US Stimulus

Mr Bernanke stepped back yesterday in testimony, telling a Senate committee not to expect imminent moves.

“We are not prepared at this point to take further action,” he said. The comment sparked a recovery in the US dollar, eliminating a strong recent prop for oil prices. Investors using other currencies flock to US dollar denominated commodities, such as oil futures, at time of US dollar weakness.

Oil traders said the news would be a welcome sign of improvement in the US economy, but it was overshadowed by greater concerns about a possible downgrading of US government debt as the White House and congressional leaders remain at impasse on a budget agreement.

Mr Bernanke warned a US government default would destroy investors’ trust in the US.

US Dollar Gains

The US dollar moved higher in currency market traing this morning following the comments, with the ICE US Dollar Index back at 75.435.

“The Bernanke comment caused a complete halt of what was going to be a rally attempt to $100 a barrel, above which US crude oil prices hasn’t settled since 9th June.” according to Tony Rosado, a broker at GA Global Markets.

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WTI oil trading back at $96 after US Bernanke comments