WTI oil price heads under $83 a barrel after Fed comments on US economy

The price of WTI crude oil fell under $83 a barrel in early trading on Friday after yesterday’s comments from Federal Reserve Chairman Ben Bernanke dashed traders hopes for a quick stimulus to the frail US economy and boosted the US dollar on currency markets.

Latest WTI Oil Price

US Light crude oil futures for July 2012 delivery was trading at $82.75 a barrel, 08.02 GMT today in electronic trading on the NYMEX, or 1.7 percent lower.

The price of WTI crude oil has fallen sharply in the past three months, with New York’s main contract, West Texas Intermediate crude, down from $110 a barrel at the beginning of March on concerns about a global economic slowdown.

US Fed Comments

Bernanke said that the Fed remains ready to act if the financial crisis in Europe threatens the US economy. But he didn’t indicate that any new steps were on the way.

Oil traders had hoped the Fed would consider taking measures to boost the economy after recent reports, particularly the hiring numbers for May, painted a picture of slower economic growth.

The Fed’s previous stimulus efforts boosted oil prices because lower interest rates reduced the value of the US dollar against other currencies. Commodities like oil are priced in dollars so the weaker dollar makes them cheaper for traders who use other currencies.

However with the dollar again on the rise, it seems likely that the price of oil will once again head south.

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WTI oil price heads under $83 a barrel after Fed comments on US economy