Brent oil price at $79 as US Dollar Index trading lower

Brent oil prices open trading stronger this morning and are hovering around the $79 mark as the US Dollar Index is trading lower suggesting that the US dollar has more to fall.

In London, Brent crude oil futures for November 2010 delivery was trading at $79.02, 08.15 GMT on the ICE Futures Exchange and could test the $80 price level today.

The US Dollar Index, which tracks the US dollar against the currencies of six major US trading partners including the euro, yen and pound, was at 79.34 after touching 79.26, the lowest since 3rd February 2010.

“There’s ongoing speculation that we will see further quantitative easing from the Fed. We will see the US dollar remain on the back foot.” said Mike Jones, a currency strategist at Bank of New Zealand.

Brent and WTI Price Gap Closes

The price difference between Brent oil futures and WTI oil futures has narrowed to $2.20 a barrel today from as much as $4.00 earlier this month as WTI rose nearly four percent in trading last week.

Meanwhile, hedge funds and investors reduced their bets that Brent and WTI oil prices would climb for the first time in two weeks. The net long positions held by money managers declined by 16,286 contracts, or 13 percent, to 106,323 for the week ended 21st September, the US CFTC said in its weekly Commitment of Traders report.

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