Wednesday, May 28, 2008

Oil bubble or dollar collapse?

NPR Marketplace

Ryssdal: It's a global market, Jeremy, for oil, right, so I have to ask about external factors other than supply and demand. What about, you know, the dollar for instance?

Hobson: Well that definitely plays into it. I mean, we've all heard about speculation in the oil markets and if the value of a dollar is weakening, why would you want to buy it? You'd go for something that's going up, like perhaps oil. The other part of it is oil is bought and sold in dollars and one analyst told me today if the dollar were even with the Euro right now, we wouldn't be looking at a $130 barrel of oil, we'd be looking at $80 a barrel of oil, so that weakening dollar is having an effect on the price that we see here in the United States.

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