February 2010
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Page added on February 9, 2010

Brent oil price flat, trades at $70 in choppy phase

Brent oil prices opened trading on Tuesday flat and it seems that a “choppy phase” for oil prices will continue amid global crude oil demand concerns and a stronger US dollar.

ICE Brent crude oil futures for March delivery fell 3 cents, or 0.04 percent, to $70.08 a barrel on the ICE Futures Europe exchange in London at 2:26 p.m. Singapore time, and yesterday Brent rose 52 cents, or 0.8 percent, to $70.11 a barrel.

Oil futures reversed losses as the US dollar declined for the first time in five days on news that Central Bank President Jean-Claude Trichet will leave a meeting in Sydney early, raising optimism policy makers will assist Greece. A falling greenback spurs demand for commodities as a hedge against inflation concerns.

Crude oil prices slipped to $69.50 a barrel in floor trading on February 5th, the lowest since December 15th 2009. This level will present technical support as long as the market doesn’t settle below it, according to Gordon Manning, a Sydney-based technical analyst at Australia’s third-largest bank, who correctly predicted on February 2nd that oil prices would rise above $78 before pulling back.

“Sixty nine dollars was pretty important on a daily close basis and we sort of nudged around that and we’ve bounced,” he said. “I’m inclined to favor a bit of a bounce in the short term.”

Oil’s current “choppy phase” could favor short-term traders, Manning said.