More On How The Weak Dollar Jacks Up the Price of Oil

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Yesterday I blogged on how the weak dollar is responsible for roughly $30 of the $90 a barrel of crude has (so far) topped out at. And I’m being doubted by some in our comment section and on Digg. Today, more confirmation from the folks at Bloomberg:

Crude oil breached $90 a barrel in New York for the first time as the dollar traded near a record low against the euro, enhancing the appeal of commodities as an investment….

“The weak dollar is pushing the price higher,” said Simon Wardell, energy research manager with Global Insight Inc. in London. “It’s hard to see how this is going to turn around quickly.”…

The U.S. currency fell to $1.4302, from $1.4279 yesterday, and traded at a record low of $1.4319 earlier in the day.

A lower dollar makes oil cheaper in countries that use other currencies. In U.S. dollars, West Texas Intermediate, the New York-traded crude-oil benchmark, is up 46 percent so far this year. Oil is up 35 percent in euros, 40 percent in British pounds and 42 percent in yen.

I rest my case.

And for you yahoos who can’t understand how this can be possible when they’ve always heard that the price of gasoline is so much higher in Europe…We’re talking about CRUDE OIL, people. A raw commodity. Refined gasoline is indeed more expensive in Europe, because, largely, European governments choose to tax it to pay for roads and schools and health care and to discourage people from buying ridiculously big cars. Now you can argue about whether that is a good thing or a bad thing, but at least argue over the same issue.

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THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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