Oil above $80 on weak US dollar

22 October 2009

Crude hits 12-month high of $82 a barrel on 21 October

Oil prices moved back above $80 a barrel on 22 October as values for the key commodity continued to track movements in the US dollar.

The US’ benchmark December West Texas Intermediate (WTI) oil contract was trading at $80.70 a barrel on 22 October, down from highs over $82 a barrel seen the day before, the highest price since 14 October 2008. The contract was trading up $5.60 from the $75.10 a barrel recorded a week before.

Europe’s December Brent contract was trading at $79.10 a barrel on 22 October, up $5.90 from the $73.20 seen a week before.

The average price for the Opec member states’ 12 crudes was $76.37 a barrel on 21 October, the last date figures were available. This was up $4.41 from the $71.96 a barrel seen seven days earlier.

Analysts say that crude oil prices continue to rise on a weakening US dollar, which sunk to a 14-month low of $1.5047 against the European single currency the euro on 21 October. They attribute the fall from $82 a barrel to ‘profit-taking’ – traders selling oil at what they see as peak prices – and a rise in the dollar against other currencies.

The past two years have been the most volatile on record for crude oil prices which hit a record high of $147 a barrel in July 2008 before collapsing to below $35 a barrel in February 2009 and then staging a gradual recovery to more than $80 a barrel.

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