ANTIESTABLISHMENTARIAN

Oil closed at 83 cents short of $80.00 today setting the highest price of the year. So what’s going on, are the speculators driving it up again, are there looming shortages, shrinking supply?

No, none of the above. The rising oil price is simply a function of the falling dollar, although I’ve seen quite a few “analysts” provide all sorts of reasons from peak oil to that grand bogyman, Goldman Sachs. Oil is priced in dollars, so when the dollar falls, the price of oil rises proportionately.

I am expecting both to level off soon. The fate of the dollar charted below.