| Dollar Stops Oil Prices Rising |
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| Written by Lee Mel |
| Sunday, 21 March 2010 07:54 |
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With a flurry of dollar positive economic data items during the week, oil prices have hit a bit of a wall losing momentum from the current rally.
With a flurry of dollar positive economic data items during the week, oil prices have hit a bit of a wall losing momentum from the current rally. Crude oil prices for April future contract were at $81.71 Friday morning. This is 49 cents off from Thursday's price of $82.20 on the NYMEX. Thursday's settle price was 73 cents below Wednesday's. Part of the reason for the recent slide could be due partly to a simple correction, saying that crude oil prices are up around $14 over the last month or two. Speculator expectation for increased demand in the coming months from businesses and consumers helped fuel much of the gains. A strong US dollar can also be helping keep oil prices from rising this week. Usually, a firm dollar provides lower commodities prices. However, oil has moved in unity with equities and economic conditions over the last year, sometimes ignoring dollar improvements. Many analysts have been saying that traders have already priced in much of the increased demand for the latter half of 2010. The implication is this demand may not necessarily drive oil prices much beyond their current point. The dollar appears to have strong upward potential over the coming months as economic sentiment becomes more positive and it becomes likely that the Fed will hike interest rates. Higher yields would make the dollar more valued as a speculative interest. Of course, traders have also been factoring this potential in currency trade. Recent comments following the Central Bank meeting which ended with rates being held at low to zero suggest it could be a while before rates are moved. This has kept the dollar speculation from really taking off. Thus, some would say their are further gains for the dollar amid growing rate possibilities compared to oil prices which may have factored in increased demand in the market. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. To view real time oil prices, then visit Live Charts UK where you can also find a live gold price and other commodities prices. |