IF the USD bounce back does it means the prices of crude oil will drop?

Question

IF the USD bounce back does it means the prices of crude oil will drop?

Answer 1

The dollar may temporarily rally, but in the long term it is still going to go down.

There are reasons to expect a drop in oil prices whether or not the dollar continues to fall. Alternative sources of oil and other forms of energy are now reaching maturity.

The only thing currently keeping the price of oil higher than 1950's levels (adjusted for inflation) are speculators and taxes.

If we didn't have the war in Iraq, it could be even cheaper.

Answer 2

Maybe if we stop using crude oil and move on to alternative free energy sources, than we could really bounce back.

Answer 3

Yes, the price of oil would drop in terms of USD. Oil is like gold; valuable everywhere and a good indicator of the strength of a nation's relative currency.

Answer 4

I heard on NPR this morning that if the Dollar were trading on par with the Euro, instead of at a significant discount, oil would still be under $100 a barrel.  Most oil contracts are dollar based, so if the dollar strengthens, then a barrel of oil will become cheaper in dollar terms.