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Crude oil prices trading higher, eyes on US Dollar Index
Published on February 3, 2010 by oilprices · No CommentsCrude oil price are trading higher on Wednesday as a decline in the US dollar (see Dollar Index) heightened crude oil’s appeal for hedging inflation.
US Light crude oil futures for March delivery rose as much as 81 cents, or 1.1 percent, to $78.04 a barrel in electronic trading on the NYMEX, while in London, Brent crude oil futures for March settlement rose as much as 93 cents, or 1.2 percent, to $76.99 a barrel on the London-based ICE Futures Europe exchange.
The Dollar Index, which tracks the US currency against those of six major trading partners, dropped for a third day before a report that may show US service industries expanded at the fastest pace in more than a year. The index was at 78.873 at 11:09 a.m. London time.
“If people are optimistic about the economy and buying equities, then that will drive oil prices higher,” said Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore. “Having the dollar index drop below 79 is enough to move oil higher.”
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