More On How The Weak Dollar Jacks Up the Price of Oil

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


jedcl1f.jpg

Yesterday I blogged on how the weak dollar is responsible for roughly $30 of the $90 a barrel of crude has (so far) topped out at. And I’m being doubted by some in our comment section and on Digg. Today, more confirmation from the folks at Bloomberg:

Crude oil breached $90 a barrel in New York for the first time as the dollar traded near a record low against the euro, enhancing the appeal of commodities as an investment….

“The weak dollar is pushing the price higher,” said Simon Wardell, energy research manager with Global Insight Inc. in London. “It’s hard to see how this is going to turn around quickly.”…

The U.S. currency fell to $1.4302, from $1.4279 yesterday, and traded at a record low of $1.4319 earlier in the day.

A lower dollar makes oil cheaper in countries that use other currencies. In U.S. dollars, West Texas Intermediate, the New York-traded crude-oil benchmark, is up 46 percent so far this year. Oil is up 35 percent in euros, 40 percent in British pounds and 42 percent in yen.

I rest my case.

And for you yahoos who can’t understand how this can be possible when they’ve always heard that the price of gasoline is so much higher in Europe…We’re talking about CRUDE OIL, people. A raw commodity. Refined gasoline is indeed more expensive in Europe, because, largely, European governments choose to tax it to pay for roads and schools and health care and to discourage people from buying ridiculously big cars. Now you can argue about whether that is a good thing or a bad thing, but at least argue over the same issue.

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and billionaires wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2022 demands.

payment methods

Fact:

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2022 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate