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Ah so the Oil is not traded in dollars. Thank you.

But how does that effect the US Market? We only get about 18% of our Oil from Saudi Arabia. We get the bulk of our oil either from ourselves or from Canada and Mexico.

Since neither the Canadian dollar nor the Peso is doing so well as the Euro against the dollar, that means the Saudi oil is pricey but the bulk of of our oil is not as pricey. In fact, it should make the domestic and near domestic source considerable cheaper then the imported oil. If anything, it should be pricing the Saudi Oil off the market.

I was using Saudi oil as the standard, but the same principles apply. You mentioned Canada, early last year the Canadian dollar was at $0.75 US dollars per Canadian dollar. Today it is at about 0.92, over a 20% increase in direct costs to the dollar.

Our dollar is weak, so it costs us more to buy the same goods. The people that benefit from this though is the US tourist industry. Look at it this way:

A hotel in NYC charges $175.00 a night. In 2000 that hotel cost a European $230.00 euro's to stay there. Today that same hotel costs (assume room rate as constant) 135.00 euro.

That is how weak the dollar is today.

Canadian and Mexican oil is bought in USD.
The base formula for trade on world oil markets is based on the USD, so shell buying oil from Saudi’s with Euro’s is irrelevant. They don't substitute Euro's for dollars 1/1. It's converted according to the way all curency is converted. Now, there is a push for ME oil (Iran specifically) to trade in Euro's, making the Euro the standard of world markets trade.

THAT would have an effect on the USD eventually. But it will also be damaging to the Europeon economy, making their goods too expensive to import. So it works both ways. A weak USD would be more competitive and benefit exporters of American goods, while it hurts importers of Europeon goods, reduces our buying power. An example of the pros and cons can be seen in the Canadian dollar market right now, where the canuck buck is near par with the USD. It's damaging to exporters of Canadian goods into the USA, because they aren't as competitive with American manufacurers as they were when the canuk buck was around 70 cents. On the otherhand, they are making a killing on oil and gas.