The dollar loses ground as crude oil investment gains

Crude oil prices showed a considerable increase on the US charts today, after reports reached the market of weaker than expected consumer confidence and housing figures. Several stalls in production at key American refineries also bolstered oil investment, as traders rallied to take advantage of the short window of windfall.

West Texas Intermediate, the US benchmark fuel, gained more than 40 cents for its June delivery figures, settling at $103.28 per barrel for the day on the NYMEX marketplace. Investments in the benchmark product rose as high as $104.09 per barrel during intraday trading, before sliding back on concerns that the European debt crisis would again emerge as a primary cause for concern.

Though consumer confidence figures proved more tepid than initially expected, the drop-off was explained by the fact that the numbers for the previous month were slightly exaggerated, forcing the market to rebalance itself. Falling housing prices contributed to the equation as well.

The questionable economic state in the US subsequently caused a considerable slide of the dollar on the currency index, making crude oil and several other high profile commodities more appealing to the foreign investor. Traders tend to take any prolonged spikes in the euro’s global standings as a sign for a peak oil investment opportunity.

A US Federal Reserve meeting scheduled to take place in the near future will likely dictate the longer term path that crude oil futures will take both domestically and overseas.

Europe remains a major concern as well. Though the region’s two strongest economies, France and Germany reported improvements in their respective financial states, Italy and Spain are still contending with mounting borrowing costs, an issue that still stands un-resolved.

By: Chris Termeer