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Friday, March 8, 2013

Nice To See Today -- Strength of the US Dollar, Price of Oil

Updates

March 11, 2013: The original post noted that the price of oil rose despite a strengthening dollar, something generally not seen. A couple of folks asked about reasons for the strengthening dollar which was not the point of the post, and I don't plan to go down that road. However, today CNBC has an article on the reasons behind the stronger dollar. It's pretty light on any significant analysis but it is what it is. For those who are interested. 

Original Post

Two items from Yahoo! In-Play today --

2:30PM Dollar Jumps to Seven Month High: 10-yr: -14/32..2.051%..USD/JPY: 95.87...EUR/USD: 1.3009: The U.S. Dollar Index surged to session highs near 82.90 following this morning's jobs, and despite giving up some of its gains still remains on track to close at its best level in seven months. Action has held between 82.70 and 82.90 following the strong report as neither bulls nor bears have been able to gain control at the level.

2:29PM Crude oil futures are surging higher here and just pushed above the $92 level; Apr crude is now +0.4% at $91.92/barrel  

9 comments:

  1. Obamacare is a cancer, destroying the very fabric of our once great nation. With obamacare, the Obama failed stimulus and obama's out of control spending, we are in deep trouble as a nation gong forward. We have less than two years to put our house in order (so to speak). The equity markets are a bubble about to burst destroying everyone's retirement savings. The job statistics are manipulated to make dear leader look good only. Not to mention that the vast majority of new jobs are substandard burger flipping type jobs that will not support a family and leaves the worker dependent on the obamacare Medicare provision for health care. (except of course in north Dakota where everything is being done right in spite of federal interference and every ruling of the ndic is beyond fair to everyone involved. North Dakota government workers unlike those of all other states are perfect and deserving of sainthood, especially the republicans. There are no freeloaders in north Dakota. Everyone especially farmers earn every penny and DO NOT take any government handouts. Bruce you have a wonderful blog full of wisdom. Please stop supporting the president with congratulatory messages like your post above.

    ReplyDelete
    Replies
    1. The strength of the dollar and the price of oil usually diverge: the weaker the dollar, the higher the price of oil (all things being equal), so to see a higher price for oil despite a stronger dollar is very nice to see. I don't think the strength of the dollar today had anything to do with the president.

      Delete
  2. Batchelor interview on 3 Tribes law suit involving Dakota 3. But it is propublica, without noting that they have an agenda.

    http://johnbatchelorshow.com/podcasts/2013/03/01/first-hour

    "Friday 1 March 2013 / Hour 1, Block D: Abrahm Lustgarten, Propublica, in re: Native Americans on an oil-rich North Dakota reservation have been cheated out of more than $1 billion by schemes to buy drilling rights for lowball prices, a flurry of recent lawsuits assert. And, the suits claim, the federal government facilitated the alleged swindle by failing in its legal obligation to ensure that the tribes got a fair deal.

    Members of the Three Affiliated Tribes - the Mandan, Hidatsa and Arikara - were moved by the federal government to land that "turns out to hold a wealth of oil, because it sits on the Bakken Shale, widely believed to be one of the world's largest deposits of crude. Until recently, that oil was difficult to extract, but hydraulic fracturing, combined with the ability to drill a well sideways underground, can tap it." The result, according to several senior tribal members and lawsuits filed last November and early this year in federal and state courts, has been a land grab involving everyone from tribal leaders accused of enriching themselves at the expense of their people, to oil speculators, to a New York hedge fund, to the federal government's Bureau of Indian Affairs"



    http://www.propublica.org/article/land-grab-cheats-north-dakota-tribes-out-of-1-billion-suits-allege

    anon 1

    ReplyDelete
    Replies
    1. I won't be following the lawsuit; lawsuits generally don't interest me, but the little I know suggests the suits are among themselves, not involving the oil companies that bought the leases.

      It will be interesting to see how this plays out; I doubt anyone knew how valuable the Bakken was going to be in 2007 or whenever the issue first arose.

      Delete
  3. To what do you attribute the stronger dollar?

    ReplyDelete
    Replies
    1. Beyond my expertise to comment. Nor does it matter.

      The point of the post was that despite a stronger dollar, oil managed to rise in price. That's the real story to follow for those interested in the Bakken.

      The strength of the dollar ebbs and flows.

      Delete
  4. Two thoughts;
    Re Obama spending, I thought that Federal expenditures had dropped under Obama, The number of Fed government employees has.

    Re the Dollar; Is the Dollar strong or just everything else weak? The flight from weakening currencies, is usually to the Dollar. Unfortunately a strong dollar hurts exports and make imports cheaper.

    Mike

    ReplyDelete
    Replies
    1. 1. Google "federal spending under Obama" and you will get a gazillion hits. The Washington Post:

      http://www.washingtonpost.com/blogs/fact-checker/post/the-facts-about-the-growth-of-spending-under-obama/2012/05/24/gJQAIJh6nU_blog.html

      2. The strength of the dollar moves up and down; the point of the post was that without any other news, when the dollar strengthens, price of oil generally drops. Today, at that moment in time, oil was up even when the dollar strengthened. For some investors that would be "good" news.

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  5. The strength of the dollar, best I see it, is a legacy of our legacy and past reputation. Nothing about our budget or money printing over the past decade should legitimately result in a strong dollar. It's strength is, in part, also due to it being a stronger looking ship in a fleet of devaluing fiat currencies. Money from nothing and representing nothing is not a sustainable concept.

    ReplyDelete

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