Forexpros – Crude oil futures surged higher Tuesday after Nigerian strikes and supply fears combined with Iranian tensions and a weaker U.S. dollar added to the bullish environment.
On the New York Mercantile Exchange, light sweet crude futures for February settlement traded at USD102.53 a barrel during mid U.S. trade surging 1.20%%.
It earlier hit a daily high of USD103.41 and a low of USD101.25 a barrel. Weakness in the U.S. dollar helped to lift oil prices.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.14% to trade at 81.19.
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
Yesterday, Iran confirmed it started uranium production defying United Nations sanctions thus adding to the Iran supply worries.
Additional reports that the United Arab Emirates has delayed the launch of a pipeline that would bypass the Strait of Hormuz stroked oil supply fears.
In the U.S., markets are awaiting crude oil inventory reports expecting to show increases
Nigerian strikes and production outages have increased supply fears as Nigeria is Africa’s largest oil producer at 1.9 million barrels per day.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery climbed 0.84% to trade at USD113.39 a barrel, up USD10.81 on its U.S. Counterpart.
This greater than USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.
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