Oil prices trading steady, eyes on US dollar index

Oil prices are trading a little lower, but steady on Thursday and oil futures are again tracking the US dollar index. Crude oil prices are relatively high at the moment because investors have been buying oil and other commodities because they expect the value of the US dollar to decline.

US Light crude oil futures fell to $82.34 a barrel by 1225 GMT, having briefly slipped below US$82 on the NYMEX, while in London, Brent crude oil futures were trading lower at $81.34 on the ICE Futures Exchange.

“Oil prices are high and rising” said Roger Diwan, a oil expert at PFC Energy, a Washington consulting firm. Oil and gas demand is expected to increase as economies recover and businesses hire more workers.

“The big news is that the economies around the world have stabilised from their abyss a year ago,” Lipow said. He added that the energy demand outlook shows signs of hope given that the EIA, the IEA and OPEC have all bumped up their forecasts for the year.

The dollar index which measures the US dollars unit against a basket of six major currencies, rose 0.3%. The US dollar strengthened especially against the euro, which fell 0.5% to $1.3661. A stronger dollar tends to pressure crude oil prices, making it more expensive for holders of other currencies and less attractive as a hedge against weaker currencies.

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