Brent crude oil opens today’s trading session back at $118 a barrel as the US dollar looked weaker, as seen by a drop on the ICE US Dollar Index, adding more fuel to higher commodities and oil prices. Latest Brent Oil Price In London, Brent crude oil futures for August 2011 delivery was trading at $118.45 a barrel, 08.10 GMT this morning on the ICE Futures Exchange. Meanwhile, the ICE Dollar Index, which tracks the US dollar against six major world currencies, was recently down 1 percent at 75.03. A weaker US dollar often boosts oil prices by making the US dollar denominated commodities cheaper for holders of other currencies. US Dollar and America’s Credit Rating The US dollar fell sharply against other major currencies after Moody’s Investors Service warned of a possible downgrade of the America’s credit rating. Moody’s Investors Service kept the US Aaa government bond rating and related ratings on review for possible downgrade citing the possibility that debt limit will not be raised in time to prevent missed payments on outstanding bonds and notes. QE3 in the US? Oil prices began trading higher after Bernanke, in testimony to the US Congress suggested the central bank was open to a third round of quantitative easing. The bond buying program in the past was aimed at infusing liquidity into US markets. Oil traders are keenly eyeing the prospect of additional easing, which has been tied to a weakening US dollar and higher oil prices. “If you’re going to out there and do another QE, you have to expect the market’s going to go back to the risk on formula. They’re going to buy equities, they’re going to buy gold, they’re going to buy oil.” said Bill O’Grady, chief market strategist at Confluence Investment Management, St. Louis.

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