Steve Forbes: Weak Oil Dollars
on Sunday, May 24, 2020Steve Forbes Money Quote saying any commodity tied to the U.S. dollar tend to fluctuate with the currency. Steve Forbes said:
“Over time, there’s a very close correlation between what happens to the dollar and what happens to the price of oil. When the dollar gets weak, the price of oil, which, as you know, and other commodities are denominated in dollars, they go up” — Steve Forbes
Share the Steve Forbes Money quote image above on your site:
Short Link to this Quote:
In this quote, Steve Forbes is pointing out the relationship between the value of the U.S. dollar and the price of oil over time. He notes that oil prices, like other commodities, are denominated and traded using U.S. dollars in international markets. Forbes then explains that when the dollar weakens or declines in value against other currencies, it leads to higher prices for oil and other commodities.
His rationale is that since commodities are priced in dollars, if the dollar’s purchasing power falls, producers will charge more dollars per barrel to maintain the same value. So in essence, the quote is describing how a weaker dollar can contribute to increasing oil prices through the channel of dollar-denominated commodity markets. According to Forbes, there is a close correlation historically where a less valuable dollar corresponds with higher oil price levels.