Jacobtm
Sr. Member
Posts: 3,216
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« on: August 11, 2008, 09:17:02 PM » |
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« edited: August 11, 2008, 09:22:37 PM by Jacobtm »
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Part of the fall in recent weeks has been due to the dollar appreciating against other currencies. The dollar has recently been under-valued and oil over-valued, and since oil is traded in dollars, the two corrections serve to make the drop in oil prices seem more dramatic than it really is.
2 weeks ago, on July 28th, a barrel of oil was about $138 and 88 Euros
Today, a barrel of oil was about $114.5 and 77 Euros
It's a 17% drop in terms of the dollar, but only a 12.5% reduction in terms of the Euro. Not that the Euro is the only currency that matters, but doing this same thing with other currencies, many of which have dropped against the dollar in recent weeks, would provide similar results.
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