• 9 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 11 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 13 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 14 hours Schlumberger Warns Of Moderating Investment In North America
  • 15 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 16 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 18 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 19 hours New Video Game Targets Oil Infrastructure
  • 21 hours Shell Restarts Bonny Light Exports
  • 22 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 1 day Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Goldman’s Commodity Unit Sees Worst Q1 In A Decade

Investment bank Goldman Sachs saw…

Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

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

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


Leave a comment

Leave a comment




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