After peaking around $76 a barrel last week, the price of crude oil has appeared to stabilize near $74.50 as of this morning. The price of oil has continued to fluctuate in more volatile patterns recently due to the political uncertainty surrounding the BP oil spill in the Gulf of Mexico, as well as on the future of economic growth in the euro zone. Both the demand and supply side of the oil equation seem to be less certain and traders are witnessing larger price fluctuations as a result.
The price of oil does have a correlation with the value of the US dollar; therefore, we can make assumptions that crude oil may see an upward movement in the next few days simply because most expectations call for a decline in the USD. Any decrease in the value of the greenback typically results in a boost for oil. Traders should follow the news around the USD this week as it will likely decide the price movements for crude.