Odd as this may seem in the midst of all the financial chaos here in the U.S., the U.S. dollar has actually gotten considerably STRONGER in the last few months against most world currencies. And THAT is what has driven this decline in oil prices.
Twice as strong? I don't think so. The stronger dollar may have contributed a little, but the rest of the difference has to be due to speculation.
The dollar is getting stronger b/c European banks are buying dollars like crazy - b/c they know that they are in deeper than we are. Hence, the rise of the dollar, hence the fall in oil.
This is actually not good news, though we all love the relief at the pump.
The two are linked but it's much more than a linear relationship. Not only is there the direct inflationary effect of a weak dollar, but also that speculators buy commodities as a hedge against inflation. This causes a multiplication effect which shoots the price up to the levels we've seen.
Ever since the offshore oil ban has expired and Bush lifted it. Of course if Obama wins, it won’t matter..