Posted on 06/17/2009 3:33:18 PM PDT by FromLori
"Demand has not picked up," says CEO Rex Tillerson.
Exxon CEO Rex Tillerson says a weakened dollar, not an increase in demand is the reason for the sharp run up in the price of oil.
“When you look at just fundamentals, there’s not a lot to support the kind of price movement we have seen, let’s say, in the last six weeks,” Tillerson, head of the world’s biggest oil company, said after a speech today at a gas conference in Groningen, Netherlands. Concerns about a weakening dollar and inflation had led some investors to bet on an economic recovery and try to get ahead of a rally, he said.
...“Demand has not picked up,” Tillerson said. “Demand continues to be relatively flat or down, and inventory levels are still very high around the world, including floating inventory levels,” he said.
(Excerpt) Read more at businessinsider.com ...
Has the price been going up in other countries?
Yes, but not at the pace that it's increased here.
I do not know but that is a very good question.
The dollar crashed in 2007 and 2008, but has been rising in 2009.
A barrel of oil goes up the same in all countries.
I believe oil is usually priced in dollars. As exchange rates vary, so does the price in the local currencies.
Read that on Yahoo once, which gives the explanation about as much validity as a NY Times article...
Seems to me that if oil goes up $5 USD, and my country's currency has increased in value 10% against the dollar, that the relative cost increase for my country will be less because my money buys more dollars.
West Texas Intermediate Crude was selling at about $47 bbl around 4/21/09. Now it is over $65 bbl.
Thats the insidious tax of inflation. We pay it every tank now.
It’s always going up for a whatever reasons...Any excuse will do. No one cares anymore.
Everything goes up except wages. Nothing new.
That's kind of hard to say as its been dropping since its recent peak in October of 2008. (it's been going down since that peak)
If the value of the dollar decreases relative to all other indecies, then the price of oil/gas would appear to be going up.
But not all currencies are declining at the same rate, so I was asking if it was increasing in price in other countries.
Thanks for the link papa bear!
http://finance.yahoo.com/news/US-Dollar-Mostly-Lower-as-CPI-fxcm-15554579.html?.v=1
Yes. But on the day of purchase of a barrel of oil it's the same price regardless of currency. What happens to the exchange rate after wards is meaningless to the day of the purchase.
US Dollar decline only accounts for about 33% of the oil price rise. There are other factors. Hedge fund scum probably and Goldman Sachs
Oil has become a hedge against inflation for the traders in THIS country. So in fact, the man is correct. When the dollar drops, they buy oil. Gold is the same as many other commodities.
Just wait till the fall. I expect the dollar to be just 80 to 90% to the Canadian dollar. Since China sold bonds today and will continue to do so to get out from under OUR debt, it will mean the printing presses will really be running over time to spit them 100s out.
History repeats. Prewar Germany could not pay its debt so it printed money..and the rest is history.
...and the minimum wage is due to go up another $1.00 per hour in a month or so.
Grab yer ankles!!
I also read that some banks rented tankers to store oil on waiting for the price to go up some of the very same banks we bailed out.
Say do you have a story about china selling the bonds today?
If so please post it.
You know, is it really that hard to figure out? Gees, only Bill O'Reilly would be stumped by this. You can't keep pumping paper into the economy and not get inflation of commodities. Obama is tanking all aspects of the normal markets. I think this is just the beginning.
1) The dollar has been gaining strength, not losing;
2) The cost of oil is one of the things that weakens the dollar;
3) Any other currency against which the dollar trades is equally devalued.
I don't know why the oil gougers even bother telling these lies anymore. A blind man can see through them with his cane.
From the Politico!
"The immediate cause of rising oil prices is the weak dollar. Oil-producing countries are requiring more dollars to purchase the same barrel of oil because the dollar is worth less today than it was a few years ago. Anyone who travels abroad knows about the weak dollar. In 2000, it took $1 to purchase one euro.
Today, it takes close to $1.60 to purchase a euro. A Canadian dollar is now worth the same as a U.S. dollar, whereas eight years ago it was worth considerably less than an American dollar.
And why do we have a weak dollar?
You can start with the economic policies followed by the Bush administration. During Bush’s 7½ years in office, we have maintained large trade deficits with the rest of the world and run up large domestic budget deficits to pay for our misadventure in Iraq and large tax cuts for the wealthy."
By MARTIN FROST | 6/10/08 5:09 AM EST
http://www.politico.com/news/stories/0608/10940.html
Suppose oil is $40 USD on Monday and Blat, my currency, is 1 to 1 with the dollar. So I pay 40 Blat to buy the oil on Monday.
Now, come Wednesday the dollar has slipped and because of that oil is $45 USD. But, it so happens that now my 1 Blat buys $1.10 USD. That means that it takes 40.9 Blat to buy the oil priced at $45 USD.
This means that my cost of oil has risen 12.5% if I am using my USD. But, the USD I buy with my Blat means I am paying 2.2% more.
I realize that the dollars I bought with my Blat may have been purchased earlier at a different exchange rate, higher or lower than parity. Nonetheless, when oil goes up in dollars because the dollar declines, the currencies against which the dollar declined will buy oil at a lower price, proportionately. My numbers and timing are not precise (I'm sure) but the basic principle remains.
Obama is driving up prices for his rich oil buddies.
Sounds like the Chinese think the dollar is soon going to lose value and are converting it to “stuff” while it still has some buying-power, particularly since the cost of “stuff” is so cheap right now. On the other hand, the rapid run up in oil prices seems like more is going on than just converting dollars to oil.
Nonetheless, the Chinese are damned smart, so I suspect they're on to something, and it seems like it might be a good idea to copy their strategy. It seems like the coming massive deficit spending can't help but to produce inflation, and there is no doubt there will also be some kind of short-term stimulus to the economy, though somehow I think we may see Jimmy Carter era stagflation. (There's that comparison with Carter again!)
At any rate, the question is, would it make sense to invest in companies that produce commodities, like Exxon, etc.?
oil is going up because:
- certain Banks like Morgan Stanley took the opportunity to profit from storing oil once the future and spot prices started to differ to much (futures well above spots makes storage profitable)
- there is talk in the markets about China diverting her reserves to commodities. China has been buying much more than her usual needs, which is remarkable, since the decline in industrial production should make china buy even less than her usual needs, instead of much more.
also, the collapse in foreign trade led MANY supeships to go idle. for all military veterans over there, you are losers, the D-day armada was beaten by the armada of idle ships at the Singapore ports.
over 700 ships were there, because ofthat port’s low costs, awaiting for external trade to go up, without any service to do. the largest armada ever assembled
wrt to china, the macro-man blog has a long article about how they are buying much more commodities than their current economic state would suggest
It cost the same on the day of the purchase.
Suppose oil is priced at $45 USD on Monday and my Blat buys $1 US, then on Friday Oil is still $45 but my Blat is trading for $1.20 US, then my purchasing power has gone up, though the price of oil hasn't.
You still don’t get it. The original question that I responded to was do other countries get oil at the same price or for less. The answer is that it cost the same on the day of the purchase.
What the exchange rate does after the fact is not relevant.
No, I get that. You mean the same in USD.
What the exchange rate does after the fact is not relevant.
And I agree with that. I am talking about the relative value of country B's currency on the day of the purchase.
Not if your currency is dropping.
The person asked if the price of oil has gone up in other countries. The answer is yes. It’s the same price for every country.
*sigh*
Whatever the currency that day, oil cost the same for everybody that day.
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