Last week Oil continued its ascent into record territory. Just shy of $90 per barrel the much talked about $100 per barrel isn't too far off. Strangely the price still hasn't topped too many headlines, perhaps because prices still sit below £1.00 per litre in the UK. If that dam bursts, UK consumers could be in for a shock says Betonmarket's Michael Wright.

The latest surge has taken prices deep into uncharted territory, nearing the inflation-adjusted peak of 1980. There are fears that this could be one step too far for an already creaking world economy.

Last week we saw the first sign that the US government worries were not baseless, with the release of the consumer inflation report. This showed that the Consumer Price Index increased by 0.3 percent last month as energy costs (which had been falling for three months) posted an increase and food prices jumped by the largest amount since June.

The CPI increase was slightly above the 0.2 percent that economists had been expecting. Core inflation, which excludes energy and food, was up a more moderate 0.2 percent, in line with expectations. This is what the FOMC was mostly worried about when they cut interest rates the last time, as inflation increases at a higher pace when interest rates are low.

While there are many reasons for the increase in energy costs, OPEC blames speculators for driving up the price. Some traders concur, noting the flood of cash now chasing returns after the U.S. Federal Reserve cut interest rates and added billions of dollars of temporary reserves to the banking system. Unprecedented weakness in the U.S. dollar has also pushed investors into commodities at the start of the fourth quarter, when some investors will have reviewed allocations.

All this commodity positive investments has been a nice bonus for the USD/CAD (US Dollar/ Canadian Dollar) traders who were short. Being "short" means that traders were predicting that the US Dollar would weaken against the Canadian Dollar. The pair broke below the 1.00 mark in October, and some analysts see the pair trading as low as 95 cents by the end of the year.

In the foreign exchange circles the USD/CAD pair is referred to as the commodities pair, and for a reason, if you overlap the oil price chart and the gold chart with the USD/CAD you will see a very nice correlation.

With the oil outlook being bullish for the near term, there is a good chance that the USD will continue to weaken compared to the CAD. Betonmarkets.com allows you to take advantage of this, by buying a no touch bet on the USD/CAD. This rewards you if a certain level is never touched. A no touch with a 26 day term and barrier 400 pips above current spot could yield 8% ROI. This means the USD could strengthen slightly, flat line or fall further against the Canadian Dollar and you win.

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