Is it safe to say that crude oil price is rising faster than

skjhlkj · Coal Joined: Oct 21, 2007 Posts: 8

Is it safe to say that crude oil price is rising faster than the depreciation of dollars? Shocked

OPEC keep saying part of the reason oil price is at record high is because the depreciation of dollars, but the price of crude oil is rising way faster than the depreciation of dollars. right?

Micki

US dollar depriation against what?
Even if you look at the dollar index (which is measured agaist a basket of currencies) this does not give a 100% accurate picture as different nations import different amounts of oil. So just because a currency has gone stronger, it is hard to say what impact that had on total global oil consumption.

Safest just to say
1) dropping US$ does drive up oil price as the oil becomes cheaper for holders of appreciating foreign currency.
2) Inflation - more money in circulation looking for stuff to buy drives up prices
3) and of course general supply/demand.

Add to this trader sentiment.

Figuring out what cause resulted in what amount of price change is futile.

To support what you are asking for I think you will find that oil price has been trending up at a steeper rate for longer than the US$ has been falling. That suggest that oil price rise is more than just dollar weakness.
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nocar · Intermediate Crude Joined: Nov 05, 2004 Posts: 685

Well, I have been keeping track of the Brent price in US dollars for quite a while, and at times converted the price to Swedish kronor.

Some dates and figures, Brent in Swedish currency SEK

Jan 2004 217
Dec 2004 309
Dec 2005 430
Dec 2006 427
Aug 2007 483
Oct 2 2007 522
Nov 28 2007 573

Yes, certainly over this period, Brent has become more expensive also when converted to Swedish currency. I am pretty sure you would get a similar result if you converted to Euros.

nocar