Light oil price trading up near $78, eyes on Dollar Index

US Light oil price is trading back up near the $78 mark on Tuesday in Asia and has some support from a slightly weaker dollar as the US Dollar Index lost some value.

Traders said the oil market is likely to take its cues from dollar movements as well as global equity markets in the session ahead. Hudson Capital trader Clarence Chu said Nymex crude oil futures often gain ground on a weaker greenback as it makes the commodity cheaper for other currency holders to buy. Chu expects crude to “use the dollar for guidance.”

US Light, sweet crude oil futures for delivery in February traded at $78.24 a barrel at 0721 GMT, up 24 cents in trading on Tuesday. After trading lower for six straight sessions, crude oil futures reversed direction at the open Tuesday, gaining ground on dollar weakness. Prices moved higher after the greenback softened to a one-month-low against the yen during Asian hours, on worries earnings results from the U.S. financial sector expected later this week will be weak.

While the first week of 2010 saw crude oil prices rise by more than $3 a barrel, last week saw prices drop by nearly $5 a barrel, and further volatility is expected this week, eyes on the Dollar Index again.

Tags:  Asia, dollar, dollar index, light oil price, oil, trading, US