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Started By
Message
Oil/dollar
Posted on 1/21/15 at 12:02 pm
Posted on 1/21/15 at 12:02 pm
I don't think it has to do with the Saudis, Russia, fracking, alt energy, or any of the other conventional explanations.
I think it has to do with the strong dollar.
I think it has to do with the strong dollar.
This post was edited on 2/6/15 at 12:34 pm
5
Posted on 1/21/15 at 12:03 pm to RidiculousHype
Okay, thanks.
Posted on 1/21/15 at 12:21 pm to RidiculousHype
The USD has climbed ~17% from its summer 2014 lows while crude has dropped ~55%. The USD rising certainly has an effect on oil, but it isn't the only reason oil has dropped % wise.
Posted on 1/21/15 at 12:24 pm to RidiculousHype
It is a big reason for the drop, no question.
Posted on 1/21/15 at 12:31 pm to vuvuzela
Saudi production flat (not cutting and getting screwed like they have in the past) + increased production from other OPEC countries as geopolitical conflicts aren't impacting production as much as they have before + US production increasing and increasing and increasing + strong US dollar + slightly less demand from Europe and China = $47 oil
Posted on 1/21/15 at 1:10 pm to RidiculousHype
Using two scales like that makes it look like it correlates a lot more than it actually does. Change the data to show %change and plot them on the same axis and you will get a different picture.
Posted on 1/21/15 at 1:23 pm to RidiculousHype
They cross!!!!!
Posted on 1/21/15 at 3:55 pm to jimbeam
quote:
They cross!!!!!
Oh shite, never cross the streams!
Posted on 1/22/15 at 8:04 am to LSU0358
quote:
The USD has climbed ~17% from its summer 2014 lows while crude has dropped ~55%.
That's what happens in levered inverse correlations. This goes back decades with oil and the dollar. A small change in the dollar has caused larger changes in oil several times over.
I don't care "why" it's levered, I just care about the "what".
Posted on 2/6/15 at 12:34 pm to LSURussian
Don't let the chart below stop you from believing the groupthink 
Posted on 2/6/15 at 1:17 pm to RidiculousHype
Ok, why don't you show a chart showing the dollar and the price of oil over the last 20 years if they are that strongly correlated?
Posted on 2/6/15 at 1:51 pm to raw dog
quote:
Saudi production flat (not cutting and getting screwed like they have in the past) + increased production from other OPEC countries as geopolitical conflicts aren't impacting production as much as they have before + US production increasing and increasing and increasing + strong US dollar + slightly less demand from Europe and China = $47 oil
I felt like this thread needed that restated again.
It's a supply, demand, and currency issue.
The Saudis are getting what they want... for someone other than them, in this case U.S. tight oil, to be the world's swing producer.
Demand has to burn through current excess supply, the inventories, and keep pace with future supply growth. When that happens, we'll boom and bust again.
Posted on 2/6/15 at 1:54 pm to barry
Posted on 2/6/15 at 2:26 pm to Hand
Posted on 2/6/15 at 3:30 pm to Hand
The overhang if supply will evaporate quickly. The deckine curves on the Bakken are steep.
I think another factor is Russia and the Saudis fighting over the Chinese market.
I think another factor is Russia and the Saudis fighting over the Chinese market.
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