Wednesday, 20 Oct 2010

Crude Oil Inventories Data to Drive Oil Trading Today

The US dollar witnessed a steady depreciation against most of its major currency counterparts during the morning trading session. The dollar is currently trading lower against the EUR by nearly 80 pips at 1.3860. It is also trading lower against the CHF and JPY, as investors remain wary of making big bets in favor of the dollar these days.

Crude oil prices have been steadily recovering from a plunge during the early trading hours when prices reached a low of $79.85 a barrel yesterday, but slowly reaching back to the $80.80 level today. However, as was evidenced in the past few days, oil has great difficulty supporting its price over $85, despite a weak dollar and equity gains; therefore, trading is expected to remain volatile above and below the $80 price range as the market continues to search for the true value of crude oil.

As for today, traders should pay attention to the US Crude Oil inventories report scheduled at 14:30 GMT, as it tends to have a large impact on Crude Oil's prices, especially for the short-term.