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Oil prices rebound back above $82 on Fed, US dollar
Published on March 16, 2010 by oilprices · No CommentsOil prices rebounded higher in trading on Tuesday, moving toward $82 a barrel, as commodity traders anticipated that the US Federal Reserve will keep interest rates unchanged, while the US dollar weakened.
Light crude oil futures for April delivery recently traded $2.02, or 2.5%, higher at $81.82 a barrel on the NYMEX, while in London, Brent crude oil futures on the ICE futures exchange traded 2.3% higher at $79.64 a barrel.
Oil is taking part of its upward cue from a weaker US dollar, which has fallen against the euro, but some of the upward momentum in oil prices is also due to traders covering short positions, or previously sold contracts, following oil’s 1.8% drop to a two week low yesterday.
“We’ve gone back to that trade of oil being up on a weaker dollar and stronger equities,” noted Andy Lebow, vice president of energy with MF Global in New York. “Maybe traders are anticipating better economic data as the week goes on,” he added.
Tomorrow OPEC members meet in Vienna but the group is likely to keep crude output quotas unchanged with oil prices of around $80 a barrel seen as an acceptable level by the group.