Democratic Underground Latest Greatest Lobby Journals Search Options Help Login

Oil pricing not going up - Dollar going down

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Topic Forums » Economy Donate to DU
FreakinDJ Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Apr-18-04 09:30 AM
Original message
Oil pricing not going up - Dollar going down
OPEC Has Already Turned to the Euro

As the dollar's rate of exchange continues to fall against the world's major currencies, there has been much speculation about the likely knock-on effect. One area receiving a lot of attention is crude oil in general, and OPEC in particular.

US Imports of Crude oil

(1) (2) (3) (4) (5) (6)
Year Quantity (thousands of barrels) Value (thousands of US dollars) Unit price (US dollars) Average daily US$ per € exchange rate Unit price (euros)
2001 3,471,066 74,292,894 21.40 0.8952 23.91
2002 3,418,021 77,283,329 22.61 0.9454 23.92
2003 3,673,596 99,094,675 26.97 1.1321 23.82

OPEC mulls move to euro for pricing crude oil
Globe and Mail Update

Calgary — OPEC is considering a move away from using the U.S. dollar — and to the euro — to set its price targets for crude oil, the highest-profile manifestation of the debilitating effect of depreciation on the greenback's standing as the currency of international commerce.

Several members of the Organization of Petroleum Exporting Countries are seeking formal talks on using the euro, as well as the U.S. dollar, when determining price targets for crude, a senior oil minister within the cartel said Monday

Any move to water down the use of the U.S. dollar as the currency would have enormous symbolic impact, said one prominent Canadian energy analyst.

“On a symbolic level, I think it's huge, not only for what it says about the U.S. dollar, but also the implied change to the nature of energy trading worldwide in the future,” said Wilf Gobert, vice-chairman of Peters & Co. Ltd.

Beyond the blow to the greenback's prestige, a move by OPEC to even partly price in euros would ensure that any further depreciation in the U.S. dollar boosts oil prices, Mr. Gobert said. And any country — not just the United States — using the U.S. dollar for pricing would see the cost of the commodity rise as that currency fell. /

"If the dollar/euro value remains the same in 2004 as in 2003, prices will climb to unrealistic levels," said Hojjatollah Ghanimifard, acting deputy for international affairs at the National Iranian Oil Company.

A trader at the Rothschild bank in London added: "Trading in petrol involves enormous sums of money. If the dollar loses its role as a currency of reference, the United States, the world's largest oil importer, will no longer be able to have outside countries finance its abyssal trade deficit."

It is not like we did not say that this was going to happen. Its just when will the average John E. Taxpayer realise Bush screwed him
Printer Friendly | Permalink |  | Top
brokensymmetry Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Apr-18-04 09:40 AM
Response to Original message
1. Yep.
And it's going lower...IMO.
Printer Friendly | Permalink |  | Top