Crude is trading off slightly

Friday, 15 April 2011 04:51

Crude is trading off slightly in early US trading off the back of a weaker dollar. Benchmark crude was down 22 cents at $107 on the NYMEX at time of writing.

Oil sold off early this week from $113.46 the highest level since September 2008. However, a weaker dollar and signs U.S. gasoline consumption remains solid helped slow the losses, crude has gained 28 percent since Feb 15.

If the US currency falls it makes dollar based commodities cheaper against other currencies. The correlation between the oil and the dollar weakened between October and March yet has returned this month.

Libya which used to export 1.6 million barrels of crude a day also helped set a floor for oil prices. Expectations that China could raise interest rates to counter rising inflation and persistently strong economic growth was seen weighing on oil prices.

Investors will also be closely watching the latest data on U.S. consumer prices and industrial production scheduled to be released later Friday.