WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
sadly the only reason oil is slipping is because of fear that damage to the global economy is occurring esp. in light of the Japanese disaster that continues to go from bad to worse.
http://online.wsj.com/article/SB10001424052748703518704576258520999891428.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond
Oil is a market.... suppliers have now pushed the price of oil to the triple digits and may back off further price hikes... but they will continue to push the price up in the future esp. in light of the sinking dollar relative to global currencies.
To see the impact oil prices are having in Brazil, one of the developing countries who still buys oil even though it also produces ethanol, see the following:
http://www1.folha.uol.com.br/mercado/901457-presidente-da-petrobras-volta-a-sinalizar-aumento-da-gasolina.shtml (in portuguese - but translateable using various online translators)
The gist is that the president of Petrobras, one of the largest oil companies, is telling Brazilians they will have to adjust gasoline prices if oil continues to increase... because gasoline prices in Brazil have largely not been raised even as they have soared in the US.... at the same time, the Brazilian real (currency( has strengthened relative to the USD.
Part of that appreciation of the real relative to the greenback is because US investors want to put money into the Brazilian economy, wihch like so many others is creating wealth at far faster rates than the American economy is.
Only when the price of gasoline in BRL has to be raised because the price of oil is rising faster than the decline in the USD relative to the BRL... that is when Brazilians care about the increases in the price of oil.
.
You can replicate this story in countries around the world where the recent runup in the price of oil has not been felt near as much as in the US because their currencies have appreciated relative to the US dollar, muting the increases in the price of oil which occur in USD.
.
The price of oil is falling as the impact on the global economy is reaching not just the US but other countries, including those whose currencies have outperformed the USD and whose economies are growing faster than the US economy.
http://online.wsj.com/article/SB10001424052748703518704576258520999891428.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond
Oil is a market.... suppliers have now pushed the price of oil to the triple digits and may back off further price hikes... but they will continue to push the price up in the future esp. in light of the sinking dollar relative to global currencies.
To see the impact oil prices are having in Brazil, one of the developing countries who still buys oil even though it also produces ethanol, see the following:
http://www1.folha.uol.com.br/mercado/901457-presidente-da-petrobras-volta-a-sinalizar-aumento-da-gasolina.shtml (in portuguese - but translateable using various online translators)
The gist is that the president of Petrobras, one of the largest oil companies, is telling Brazilians they will have to adjust gasoline prices if oil continues to increase... because gasoline prices in Brazil have largely not been raised even as they have soared in the US.... at the same time, the Brazilian real (currency( has strengthened relative to the USD.
Part of that appreciation of the real relative to the greenback is because US investors want to put money into the Brazilian economy, wihch like so many others is creating wealth at far faster rates than the American economy is.
Only when the price of gasoline in BRL has to be raised because the price of oil is rising faster than the decline in the USD relative to the BRL... that is when Brazilians care about the increases in the price of oil.
.
You can replicate this story in countries around the world where the recent runup in the price of oil has not been felt near as much as in the US because their currencies have appreciated relative to the US dollar, muting the increases in the price of oil which occur in USD.
.
The price of oil is falling as the impact on the global economy is reaching not just the US but other countries, including those whose currencies have outperformed the USD and whose economies are growing faster than the US economy.
