I always hear in the news that one of the reasons for the high cost of oil is due partly to the weak US dollar. I understand that oil in the international market is priced in US dollars but wouldn't that make the cost of oil cheaper?Could someone explain the relationship between a weak US dollar and the high price of oil?
Oil is only priced in US Dollars on the commodity markets. As the US Dollar has weakened by over 30%, it takes 30% more US Dollars to buy the same 'barrel' of oil, all other factors remaining equal.Could someone explain the relationship between a weak US dollar and the high price of oil?
Because the US dollar is weak it takes more dollars to equal other countries' currency. If you are in a country where the US dollar is half as valuable as their money, to purchase an item marked $1 it would require 2 US dollars to purchase that item.
there is no relation if you live in US and spend only in US
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