Tuesday, Dec 05, 2006
Interesting twist...
BBC: Weak dollar makes Opec cut likely
The weakening dollar is increasing the chances of a cut in output by oil producers' group Opec at its next meeting later this month.
On Monday the dollar hit a 20-month low against both the euro and the pound, denting the revenues of oil exporters which sell the commodity in dollars.
Higher oil prices creates inflationary pressure which can lead to higher IRs which increases the likelihood of economic slowdown which reduces the value of the Dollar which may lead to further oil production cuts...Sounds like a vicious cycle - potentially.
Posted by tyrellcorporation @ 09:07 AM (151 views) Add Comment
4 Comments
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1. waitingfor hpc said...
Great bring it on.
2. Jake The Muss said...
Tyrell - "Higher oil prices creates inflationary pressure which can lead to higher IRs" - That's actually incorrect, lowering oil prices creates inflationary easing but increasing oil prices have virtually no effect on inflation.
3. paul said...
David "Turnip" Smith will be shouting "CONSPIRACY! OPEC are out to get us all!" (still waiting on his $40 per barrel prediction!!)
4. inbreda said...
That is funny. Puts further pressure on the use of the dollar as a global standard as well. I feel another spiral in the making