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The Forum > Article Comments > The Fed is driving down oil prices > Comments

The Fed is driving down oil prices : Comments

By Nicholas Cunningham, published 21/6/2018

The US dollar is one important variable influencing oil prices. A stronger dollar helps push down prices because it makes oil, which is priced in dollars, much more expensive in much of the world.

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While all of that is cogent and convincing Nick. Part of the underlying reason could well be, increased ramped up Saudi production and a new never before imposed, Chinese oil tariff? Plus less central heating burning up oil reserves?
Alan B.
Posted by Alan B., Thursday, 21 June 2018 12:18:32 PM
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The petrodollar used to be a thing. Now the markets are more sophisticated it's just a meme. Prices are determined by supply and demand. A higher US dollar could suppress supply by making oil extraction less economically viable in the USA, but the effect is slight.

And the IEA is wrong: no country is forced to increase interest rates to defend its currency. They have a choice of defending it or not defending it, and the latter tends to be a much better strategy in the long term.
Posted by Aidan, Thursday, 21 June 2018 3:31:28 PM
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