US dollar 'dictates oil prices'

20 January 2011

Posted by John King

The cost of heating oil could depend of the strength of the US dollar, it has been suggested.

Brent oil futures were trading at under $98 (£61.43) a barrel this morning (January 20th 2011), according to Liveoilprices.co.uk.

It stated: "The US dollar continues to dictate short-term oil prices, as seen by movements on the ICE Dollar Index."

On the ICE Futures Exchange, Brent crude oil futures for March 2011 were going for $97.62 a barrel in London.

At the same time, the ICE US Dollar Index put the currency at 78.92 against six major world tenders.

Last week, Brent oil futures hit $99 per barrel, causing concern that the cost of the fuel will continue to rise, with analysts predicting it could tip $100 for the same quantity.

Writing for Reuters, David Milliken and Dmitry Zhdannikov stated that if it reached this amount, this would threaten economic recovery for the UK and other countries in Europe.

Click here for a home heating oil quote