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Crude oil futures slip despite weaker U.S. dollar

Published 01/27/2012, 09:00 AM
Updated 01/27/2012, 09:02 AM
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Investing.com -  Crude oil futures slipped back slightly Friday, on end of week profit taking, despite a weaker dollar and signs of U.S. economic recovery.
 
On the New York Mercantile Exchange, light sweet crude futures for March settlement traded at USD99.53 a barrel during early U.S. trade slipping 0.19%.
 
It earlier hit a high of USD100.50 and posted a low of USD99.41 on the session.
 
Weakness in the U.S. dollar helped lift crude oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.08% to 79.47.
 
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
 
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 3.6 million barrels in the week ended January 20.
 
Total U.S. crude inventories stood at 334.8 million barrels, remaining in the upper limit of the average range for this time of year.
 
The Federal Reserved vowed to keep interest rates between zero and 0.25% until late 2014, extending the earlier mid 2013 target, adding to the dollar weak, oil bullish environment.
 
Additional word from Bernanke revealed he is not opposed to further monetary easing further depressing the greenback.
 
Later in the day, The U.S. Commerce Department is expected to say that the U.S. gross domestic product grew at 3%.
 
Earlier, durable goods advanced 3% after posting a 4.3% gain the previous month. This is the biggest back to back gain in almost a year.
 
In Greek news, European Union Monetary Commissioner, Olli Rehn hinted that Greece is close to a deal with its creditors at the World Economic Forum in Davos.
 
Rehn stated, “The next three days will be very crucial. An agreement may come, if not today, then over the weekend,” further fuelling the euro’s advance.
 
In Iranian news, the nation has threatened to close the Strait of Hormuz in response to the pending euro zone Iranian oil embargo.
 
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery advanced 0.16% to trade at USD110.97 a barrel, up USD11.46 on its U.S. Counterpart.

This over USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.




 

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