Filed under: Commodities , Oil The worst news Wednesday regarding oil wasn't its record high close of $143.57 per barrel. It was the dollar. "There may be another record Thursday, and another Monday, and so on," energy trader Jim Dietz told BloggingStocks Wednesday. The reason? Concern that the already weak dollar will fall further, Dietz said. The European Central Bank meets Thursday to vote on interest rates, with many economists expecting the ECB to increase it refinance rate by 25 basis points to 4.25%. If it does, the dollar may fall further, Dietz said. Traders eye ECB meeting "And if the dollar falls, that would put even more upward pressure on oil, so all eyes will be on that ECB decision," Dietz said. The ECB will announce its decision Thursday at 7:45 a.m. EDT. Oil tends to rise when the dollar falls, as investors / traders seek to preserve purchasing power of the decreased value of dollar-denominated commodities by bidding their price up. However, it's important to note that the dollar / oil correlation is not perfect: there have been instances in which the dollar fell and oil fell. Thursday won't be one of those instances, Dietz said. "If we see a major move down by the dollar, say one cent against the euro, that will easily send us over $145 a barrel," Dietz said. As of late Wednesday afternoon, the dollar had already fallen about nine-tenths of a cent to $1.5882 versus the euro. Continue reading Oil closes at record ...
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Filed under: Commodities , Oil The worst news Wednesday regarding oil wasn't its record high close of $143.57 per barrel. It was the dollar. "There may be another record Thursday, and another Monday, and so on," energy trader Jim Dietz told BloggingStocks Wednesday. The reason? Concern that the already weak dollar will fall further, Dietz said. The European Central Bank meets Thursday to vote on interest rates, with many economists expecting the ECB to increase it refinance rate by 25 basis points to 4.25%. If it does, the dollar may fall further, Dietz said. Traders eye ECB meeting "And if the dollar falls, that would put even more upward pressure on oil, so all eyes will be on that ECB decision," Dietz said. The ECB will announce its decision Thursday at 7:45 a.m. EDT. Oil tends to rise when the dollar falls, as investors / traders seek to preserve purchasing power of the decreased value of dollar-denominated commodities by bidding their price up. However, it's important to note that the dollar / oil correlation is not perfect: there have been instances in which the dollar fell and oil fell. Thursday won't be one of those instances, Dietz said. "If we see a major move down by the dollar, say one cent against the euro, that will easily send us over $145 a barrel," Dietz said. As of late Wednesday afternoon, the dollar had already fallen about nine-tenths of a cent to $1.5882 versus the euro. Continue reading Oil closes at record ...