Oilprice.com (http://oilprice.com/Energy/Energy-General/How-The-US-Dollar-Influences-Oil-Prices.html) has a very nice chart (and article) on the correlation between the price of crude oil and the value of the dollar:
The article suggests that the correlation is so strong because the value of the dollar influences the price of crude… It is more complicated than that… Other factors such as US economic growth vs. rest of world might explain the underlying link… Rapid growth in emerging markets could increase demand for crude oil (high income elasticity of demand relative to the US) and weaken the dollar (pre-2008?)… A worldwide recession would decrease demand for oil, while a flight to quality in financial markets could prop up the dollar (2008?)… Aggressive monetary policy including quantitative easing could keep the dollar relatively low while world economic activity recovers (2009-2014?)… In fact, all four potential dollar/oil price relationships (dollar up, crude up; dollar up, crude down, etc…) are plausible… It’s too easy and convenient to explain away a crude oil price move with what just happened to the dollar… Let’s try to dig down and find out what actually moved the dollar in the first place before using it as a reason for the change in oil prices…
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