Light oil prices at $83 in early trading, US dollar dips

US Light crude oil prices open trading around the $83 mark as yesterday’s US Fed interest rate hold made the US dollar dip lower.

The US dollar declined yesterday after the Fed announcement, bolstering the appeal of commodities including oil prices. The dollar traded down 0.1 percent at $1.3211 per euro at 11:13am today, Singapore time, after falling 0.4 percent yesterday.

Crude oil inventories increased by nearly 2 million barrels last week, more than analysts expected, according to the US Energy Department’s weekly report by the EIA. Even though supplies are three percent lower than 2009, they remain well above average levels.

“Any way you look at it, we have a huge supply of crude oil, gasoline, and distillates,’’ said Jim Ritterbusch of Ritterbusch and Associates. Analysts say consistently low US interest rates played a role in pushing oil prices higher over the past year. Raising rates could temper economic growth in the US.

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