• 8 minutes U.S. Shale Oil Debt: Deep the Denial
  • 13 minutes WTI @ $75.75, headed for $64 - 67
  • 16 minutes Trump vs. MbS
  • 15 mins Knoema: Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030
  • 16 mins Nuclear Pact/Cold War: Moscow Wants U.S. To Explain Planned Exit From Arms Treaty
  • 20 mins Why I Think Natural Gas is the Logical Future of Energy
  • 34 mins Merkel Aims To Ward Off Diesel Car Ban In Germany
  • 3 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 10 hours Get on Those Bicycles to Save the World
  • 1 day The Dirt on Clean Electric Cars
  • 16 hours Can “Renewables” Dent the World’s need for Electricity?
  • 1 day Owning stocks long-term low risk?
  • 19 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 7 hours Long-Awaited Slowdown in China Exports Still Isn’t Happening
  • 10 hours Can the World Survive without Saudi Oil?
  • 16 hours Satellite Moons to Replace Streetlamps?!
Alt Text

Oil Experts Divided As Iran Sanctions Loom

The world’s top oil trading…

Alt Text

Goldman Sachs: This Is The Next Big Risk For Oil

Goldman Sachs commodities expert Jeffrey…

Alt Text

Goldman Sachs: Oil Unlikely To Reach $100

Goldman Sachs’ chief commodities analyst…

Martin Tillier

Martin Tillier

More Info

Trending Discussions

Ride The Rally But Practice Caution

If the last few weeks in the commodity markets have proved one thing it is that the strongest fundamental influence on pricing in those markets is the relative strength of the dollar. The inverse nature of that relationship is ably demonstrated by three simple six month charts, for the dollar index, gold, and oil.

(Click to enlarge)

Figure 1: Dollar index 6 Month chart



As you can see the dollar spent the last quarter of last year rising, while both gold and oil fell. By February, however, as the dollar topped out and turned, both gold and oil began to recover. Those moves in the dollar were largely in response to market expectations regarding the Fed’s actions.

Late last year it became clear that the Fed wished to “normalize” interest rates by returning to a gradual program of rate increases as soon as they thought the market could bear it. Given the fact that Japan and the ECB, along with several others were still trying to combat sluggish growth by racing to the bottom in currency terms that led to dollar strength.

By the end of January, however, as the U.S. and global stock markets fell dramatically, the Fed began to show signs of wobbling. Conventional wisdom shifted and there was a growing belief that they would not follow through with the program and may not raise rates this month as had previously been assumed. When the Fed’s (in)decision was announced on Wednesday it became clear that…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News