Are oil prices really rising or is the dollar just becoming weaker and weaker?

Question

Are oil prices really rising or is the dollar just becoming weaker and weaker?

Answer 1

Take a look at this:

http://finance.yahoo.com/echarts?s=FXE#c...

Over the last year, the euro gained about 20%, oil, 120%.  In other words, the increase in oil prices is much greater than the fall in the dollar value.

Answer 2

is rising, i use € and its more expensive day by day

Answer 3

Combination of both.

Answer 4

it is a vicious cycle. now that the Arabs who wish the western world ill have seen that they can destabilize our economy by driving the price of oil up they are doing what they can to cause the most damage and grief considering they have no other way of attacking without us retaliating.

Answer 5

The weak dollary definately puts upward pressure on oil prices. There is other factors at work in oil prices than just the weak dollar. Growing global demand places a strong upward pressure on the price as well. It's natural that this increases the price, because normally the higher prices increased demand creates signals for more production and greater supply. However, at this time, the world is running at near maximum production. Foreign oil states are typically running at around 90% and our refining capacity is running around 90%. This type of production can't last for an extended period of time and still meet demand, if some natural disaster or an attack somewhere in the Persian Gulf created a supply disruption, prices could soar to much, much higher.

Part of the high prices of oil can be contributed to speculation as well. Speculation is natural in comodity market. It is a vital tool to ensure a price for future shipments. Producers won't supply the good if they can't guarantee the price when they sell it in the future. Right now, with the factors I mentioned above and others, there is a lot of speculation. There is a great deal of speculation over the future supply of oil; more production, peak oil, etc... Democrats and the environmentalist left wingers don't want the supply to increase and they have prevented the expansion of production and refining capabilities. This strong stance against oil puts a lot of upward presure on the price through speculation. If we have to drill and refine more of our own oil, it will take years to get that to the market place (build refineries, build pipelines, build rigs, etc...). Even if Saudi Arabia was going to supply more, they would need to drill more wells, which could take a few years to get online.

As you can see, there is strong upward pressure on the price of oil, it's not the oil companies who are jacking the price up, they do not set the price of oil and threatening to take more money from them is oil going to make their profit margin higher because they won't invest in larger projects due to uncertain future earning potential. OPEC nations may be partly to blame but they seem just as confused at what is going on then we do. If you want to blame someone, turn to your leaders in Washington. The members of congress have not come up with a solid energy policy. Prices have been rising for the last few decades and they have done nothing to develop our own resources. This administration, with all their flaws, has been the most aggressive in pursuing renewable clean technology and this is still a decade or more away from making a major difference on our oil consumption. Thus, this is not the answer, we need oil now and we need it bad. The only solution; get more oil. Our congress has not passed a single piece of legislation that would do this. Rather they go after the profits of oil companies to invest it in technologies ten years down the line. Also, bills have been proposed to increase the prices. Does this make any sense to anyone outside of those who have been brain washed to believe fossil fuels and American oil companies are evil. Fossil fuels have advanced our country and economy to where we are today. Our society runs on oil and on coal, how are you going to change this over night? We can't, but thats what they are trying to do and that is why you see such high prices for oil and we will see it in coal as well, even though we do have tremendous supplies of coal. This is not the free market at work. This is the government manipulating the market that is telling us; supply is short of demand and there is speculation of whether supply will be able to meet demand in the future, some are working very hard to make sure that supply does not come close to satisfying demand.

If the U.S. announced tomorrow: 'We are going to go after our own resources and we will be energy independent within the next two decades. I can guarantee you, the cost of oil would drop because future supply pressure has been eased. Other countries would think we were serious, and boost their supplies as much as they can to get the price down to reduce our incentive to get off foreign oil.

Call you congressmen and senators, tell them that without pursuing more oil (oil shale, coal to oil, and drilling) we will not be able to afford to pursue those solar panels, those windmill farms, those geothermal plants, battery technology, etc... We will get there much sooner if our economy is strong to invest in those technologies.

Answer 6

ya there really rising!!

and no sign of stopping!!

Answer 7

both

Answer 8

Oil prices are rising almost everywhere... it's bound to. We only have so much fossil fuel available to us, and we're running out.

Answer 9

Oil prices are rising because oil companies are probably collecting their profits in another stronger currency, so not only does that drive up the price of gasoline at the pump, but it weakens the dollar, along with everything else that is already contributing to the weak dollar, like the money supply which is driving inflation up. Its the gov's fault for everything, we should overthrow is and start all over.