• 5 minutes Mike Shellman's musings on "Cartoon of the Week"
  • 11 minutes Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 1 day The Discount Airline Model Is Coming for Europe’s Railways
  • 6 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 15 hours Pakistan: "Heart" Of Terrorism and Global Threat
  • 1 hour Renewable Energy Could "Effectively Be Free" by 2030
  • 2 hours Saudi Fund Wants to Take Tesla Private?
  • 2 days Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 11 hours Starvation, horror in Venezuela
  • 20 hours Venezuela set to raise gasoline prices to international levels.
  • 14 hours Are Trump's steel tariffs working? Seems they are!
  • 2 days Batteries Could Be a Small Dotcom-Style Bubble
  • 2 days France Will Close All Coal Fired Power Stations By 2021
  • 2 days Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 1 day Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
Alt Text

Green Bonds Are A Huge Boost For Renewables

The growing popularity of ‘green…

Alt Text

The Best Places In The World To Mine Bitcoin

As Chinese bitcoin miners face…

Alt Text

Clean Energy Stocks Outperform Oil And Gas

Green energy stocks saw tremendous…

Keith Schaefer

Keith Schaefer

Keith is the publisher of the Oil & Gas Investments Bulletin – an investment newsletter that looks at opportunities within the Canadian small cap oil…

More Info

Trending Discussions

What the US Dollar can Tell us about the Oil Market

What the US Dollar can Tell us about the Oil Market

Many investors study supply and demand statistics to figure out where they think the oil price is going.

But by far, the biggest factor that determines the oil price is the US dollar, says Donald Dony, who pens The Technical Speculator investment newsletter.

“The US dollar is absolutely pivotal for commodity prices,” he says.  To pros in the investment game, that is a truism; obvious.  But most investors underestimate the background impact the greenback has on oil prices.

And Dony expects the US dollar to keep grinding higher.

“Our analysis  on the USD is looking bullish on the longer term basis—86-87 or even up to 90 cents on USD index.  The U.S. economy continues to improve thanks to the ongoing commitment of the Fed to its stimulus program.  As long as the Dollar keeps rising, we will definitely see a negative impact on oil prices.  The dollar needs to fall through $0.82 before a trend reversal occurs.  If it does, commodities should jump.”

Brent Crude Oil Spot Price

Related article: A Big Boost for U.S. Oil Reserves

He adds that the US dollar and the S&P 500 index appear to be back to their traditional—and positive—connection, that’s not good for commodities.

“I see another six more months of higher S&P.  All tops are big distribution pattern. Generally speaking, what happens is that for 6-8 months the market can’t move higher—but it doesn’t drop either.

“If that’s the case, we have nothing like that in the S&P right now.  That alone gives us a bit of a picture. If the S&P stays at 1600 all through the summer, we may not see a downturn until the end of the year.  These distributions last for months—often 6 months or more, where the market tries to go higher but there just aren’t enough buyers.”

Dony also says the oil price also follows the stock market-but not like it did years ago.  He says that now, unlike 30 years ago, we have a real world economy; it’s not just the S&P based in the USA.  Oil is following what global markets are doing, not just the S&P—and he says global markets not really going anywhere; they’re up marginally but not strong.

MSCI World Index

Related article: Short Term Oil Market Predictions from OPEC and the EIA

Dony expects the world’s stock markets to continue advancing slowly as long as the U.S. stimulus program is in place.

“The charts show there is a rhythm to GDP (Gross Domestic Product) over the last 30-40 years that gives us a low every five years.  If that’s the case, we’ll likely see the next low sometime in 2014.  I don’t know how deep or how long the next correction will be.  And most of the world’s GDP has already declined for the last two years—even three. I expect another low next year.”

By. Keith Schaefer




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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