A little more than that. But the dollar strength is certainly lowering the dollars per barrel cost.
Note the recent change in the price per barrel/gold.
Oil prices are dropping because the U.S. dollar has been gaining strength against almost every other world currency in recent months. There’s really nothing more to it than that.
A little more than that. But the dollar strength is certainly lowering the dollars per barrel cost.
Note the recent change in the price per barrel/gold.
not even supply and demand?
“Oil prices are dropping because the U.S. dollar has been gaining strength against almost every other world currency in recent months. There’s really nothing more to it than that.”
Then why are the Saudi’s dropping their price for the US and raising their price (in US dollars) for other regions?
Oil was at 115 USD/bbl in mid-June. It opens today at 78 and change USD/bbl.
The dollar has not strengthened that much against other currencies, but it will be appreciating against the yen for some time.
Over the past FOUR MONTHS, the US has increased production by 500,000 barrels per day. Libya has moved from 200k bbl/day to 900k bbl/day.
IEA projection for 2014 global demand growth was only 700k bbl/day. In other words, supply is exceeding projected demand by somewhere in the neighbourhood of a half million barrels/day.
Strong dollar is only part of the equation. Supply/demand is out of whack. Emphasis on “whack”, which is what the Saudis are trying to do to US export potential.
There’s truth in that. And I still note folks are talking about the dollar being replaced, when in fact it’s still the best currency out there.
We all know it has problems what with the way our nation is being run, but with the right policies, even now our system could be made much stronger, and the dollar along with it.