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Crude oil trading up 2 percent, on US dollar, Iran tensions
Published on February 16, 2010 by oilprices · No CommentsCrude oil futures are trading over two percent higher in a busy session on Tuesday, helped by a weaker US dollar and renewed tensions over Iran’s nuclear ambitions.
As US traders returned to work after the Presidents Day holiday on Monday, Light crude oil futures for March delivery on the NYMEX was trading at $75.75 a barrel, or nearly two and a half percent higher nearing the $76 dollar per barrel mark, while in London, Brent crude oil futures are up $1.52 at $74.03 on the ICE Futures Exchange.
After taking out resistance near Thursday’s high of $75.69 a barrel, the market could be set for another run to the $77 to $78 level reached two weeks ago. Position adjustment ahead of the expiry of March crude oil options on Wednesday also may guide the market’s course.
Still, some oil traders were skeptical that crude prices could rally much higher, given persistent weak US demand and still high inventories. “I don’t see true conviction to move much higher,” said Tony Rosado, a broker with GA Global Markets in New York.
Traders were watching for any significant developments regarding Iran, which maintains that its interest in developing nuclear capability is for peaceful nuclear energy purposes. US Secretary of State Hillary Clinton met with Saudi Arabia’s King Abdullah on Monday, building the case for economic sanctions on Iran.
The US dollar was weak against the euro early Tuesday, sparking some interest. There is often a correlation between oil prices and the dollar’s exchange rate, with investors’ risk appetite and other factors moving funds back and forth between commodities like crude oil futures and the US dollar.