How is the high petrol prices related to the low american dolar?

Question

How is the high petrol prices related to the low american dolar?

Answer 1

A friend of mine explained it this way: "When the FED lowers interest rates that decreases the value of the US Dollar. The Dollar is the currency that oil prices are denominated in. Thus, a lower dollar will drive all commodities that are priced in US dollars higher, hence, your high oil prices."

As the Dollar rises, oil should decrease in price per bbl.

As US interest rates rise, oil should decrease in price per bbl. Higher rates also contain huge economic risks to the fragile banking, credit, mortgage and real estate sector, and would likely prolong or worsen those issues in order to save 10-15 cents a gallon for awhile.

The US Federal Reserve does not control oil prices, and can influence oil prices by strengthening the USD, such as raising US interest rates.

What the FED and many others do not get is that oil prices are not determined by the President (Bush), his "oil buddies in Texas," or by Halliburton, VP Cheney, or anyone else in the USA, and anything that the FED or anyone tries to do, to influence a global market will only be shorted lived when supply and demand are ultimately driving the price of such commodity.

Answer 2

ummm, isn't this self explanatory? The question almost answers itself.

Answer 3

The oil market is based in us dollars for some reason.  Weaker dollar = higher prices.