Oil prices and the dollar have been highly negatively correlated during the oil price collapse. From June 2014 through September 2016, the correlation has been -95%.
In financial articles, it's a commonplace to read that oil prices fell because the dollar strengthened, or oil prices rose because the dollar weakened. This is largely a confusion of correlation with causality.
It is true that there is a linkage. A stronger dollar does render oil prices higher in foreign currencies, thereby adversely affecting demand, a negative factor for oil prices. Continue reading "Myths About Oil And The Dollar"
