realist42's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/208590/comments http://seekingalpha.com/article/80949-oil-swings-go-beyond-fundamentals?source=feed#comment-183568 183568
Simultaneously Bernanke and the Fed seem not to fully appreciate the impact of keeping interest rates artificially low. 15 percent of the increase in oil prices can be tied directly to the weakening of the dollar relative to the Euro in the last year. So that $138 barrel would cost only $120 if the dollar were stronger and that doesn't even take into account the speculators that are trying to protect themselves against the weak dollar by buying oil.

Finally, lets not forget that the Riyal is tied to the Dollar, the weak dollar has made it more expensive to live in Saudi Arabia, not giving them any incentive to increase oil production and risk further weakening the Dollar.

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Simultaneously Bernanke and the Fed seem not to fully appreciate the impact of keeping interest rates artificially low. 15 percent of the increase in oil prices can be tied directly to the weakening of the dollar relative to the Euro in the last year. So that $138 barrel would cost only $120 if the dollar were stronger and that doesn't even take into account the speculators that are trying to protect themselves against the weak dollar by buying oil.

Finally, lets not forget that the Riyal is tied to the Dollar, the weak dollar has made it more expensive to live in Saudi Arabia, not giving them any incentive to increase oil production and risk further weakening the Dollar.

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