WTI oil futures open Friday’s trading session firm at $89 a barrel as markets were lifted on news that five of the world’s leading central banks will back unlimited cash loans to make lending easier in Europe. Latest WTI Oil Price US Light crude oil futures for October 2011 delivery was trading at $89.43 a barrel, 07.05 GMT this morning in electronic trading on the NYMEX. Central Bank Dollar Promise European stock markets gained over 3 percent and the euro rose on Thursday after leading central banks said they would provide unlimited dollars to cash squeezed markets over the next three month period. “The governing council of the European Central Bank has decided, in co-ordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity providing operations with a maturity of approximately three months covering the end of the year.” the ECB said in a statement. The news pushed the US dollar lower and oil prices, which are priced in US dollars, tends to rise as the dollar falls and makes oil futures cheaper for investors buying in other currencies. Greece Default? The latest in a long series of liquidity pumping exercises has apparently saved all of Europe’s banks and further crushed already miserable short sellers in US stocks and banks, but it may be serving another purpose – Setting up for an imminent default by Greece. If Greece defaults the first obvious panic will be how do the European banks get funding, especially in US dollars. Well, that question has been answered. The mechanism to avert short term liquidity problems after Greece defaults is now in place.

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