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Page added on January 29, 2010

Crude oil prices trading higher amid a stronger US dollar

Crude oil prices hovered around $74 a barrel in early trading on Friday, firm under pressure from a stronger US dollar (see Dollar Index), gleaning support as traders seized the opportunity to buy oil futures at current levels.

Crude oil was firmer on technical buying “as investors see value in crude at these levels,” said Ben Westmore, analyst at National Australia Bank, who predicted limited downside from current levels and possibly a rebound above $75 a barrel.

Oil prices held on in positive territory Friday in spite of weaker Asian equities markets and a rebound for the greenback. Westmore said effects of the banking-related news from China and the US are likely to fade, but said the market may increasingly come under pressure from issues related to sovereign risks, highlighted by Greece’s budget crisis. “That could have a damping effect on crude going forward.”

On the NYMEX, Light crude oil futures for delivery in March traded at $73.69 a barrel at 0655 GMT, up 5 cents, while in London, Brent crude oil futures on London’s ICE Futures exchange was 10 cents higher $72.23 a barrel.

Jim Ritterbusch, president of trading advisory firm Ritterbusch & Associates, said this week’s trading action showed “the ability of the crude oil market to hang tough at around unchanged levels, despite a further strengthening in the US dollar and renewed weakening in equities markets.”