Spot Crude Oil Rises despite a Stronger Dollar
November 18th, 2009 Posted in Oil and Precious Metals
Crude oil prices rose today for a forth consecutive day after the commodity came off its lowest level in a month. Driving the prices higher were a weaker dollar and data from the American Petroleum Institute which reported smaller than expected crude oil inventories in the U.S.
Oil broke the $80 mark today during the afternoon trading session in Europe, rising to a high of $80.50 from an opening price of $79.95. The EUR/USD rose to a high of 1.4970.
Crude prices jumped yesterday after the API released its results of crude oil inventories that showed the crude oil inventories were reduced by 4.367M barrel for the previous week. The value forecasted by market analysts stood at 600K barrels.
Spot crude oil trading during today’s New York session will focus on the crude oil inventories report from the Energy Information Agency. The EIA is expected to release a value for the change in the level of crude oil inventories for the previous week. The release is predicted to be a decline of 0.8M barrels. Prices could potentially rise after the release if crude oil stocks are reduced by an amount that is larger than the expected value.
It should be noted that yesterday’s price of crude oil was higher despite the stronger dollar. This runs contrary to the typical inverse relationship between the price of crude oil and the dollar. As the price of crude oil rises, the dollar typically weakens. Could this be an early sign of a shift in the relationship between the dollar and crude oil?
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Tags: Commodities, Crude Oil, Crude Oil trading, dollar, Forex Trading, price, spot crude oil
