Commodity Daily News

U.S. Dollar's Sudden Weakness Generates Rally for Crude Oil

Marking one of the largest price jumps in a single day, the price of Crude Oil spiked over 400 points towards the end of Friday's trading session. Not necessarily indicative of anything sinister, the price jump can simply be correlated with a sudden depreciation of the USD. This came after Federal Reserve Board Chairman Ben Bernanke indicated a willingness to back-up home loans, but warned of a slow moving economic turn-around. Stocks saw a sharp decline shortly thereafter, followed by a significant devaluation of the USD.


Since the price of Crude Oil is indirectly correlated to the value of the Dollar, when the USD drops, the value of a barrel of Oil rises, as traders saw last Friday. So far today, the price for a barrel of Light Sweet Crude holds its recent gains and sits patiently near $69. Unless the greenback gets back its lost momentum, traders might see the price for a barrel of Oil continue to rise to as high as $80. The USD is the currency to watch this week for those trading Crude Oil.