WTI Oil Trades over $81

Source:

"USD weakness likely to persist, which will add to oil price gains."

WTI oil is trading over $81 a barrel early on Tuesday as oil prices made 3% gains yesterday and the U.S. dollar continued to sink lower against other major currencies.

U.S. Light crude oil futures for September 2010 delivery was at $81.50, 07:45 GMT on the NYMEX.

The U.S. dollar hovered near a 3-month low against most major currencies and the ICE Dollar Index stood at 80.96 late Monday and a break below 80.723 would put it below its 200-day moving average for the first time since January 2010.

Traders said exporters have been lowering the levels at which they are willing to sell the U.S. dollar on views that weakness in the U.S. currency is likely to persist, which would only add to oil price gains.

Oil prices surged along with other commodities yesterday after July manufacturing indexes in the U.S., Europe and the UK all came in better than expected.

The reports boosted confidence that economic growth continues, after several weeks of mixed indicators. Similar optimism about future commodity demand caused crude oil prices to double back in 2009.

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