Nov. 18 (Bloomberg) -- The falling U.S. dollar's effect on oil revenues overshadowed Saudi Arabia's promises to fight global warming at this weekend's OPEC summit in Riyadh.
Saudi Arabia, considering a revaluation of the riyal against the dollar, had to fight off an attempt by Iran and Venezuela to get the group to discuss pricing oil in different currencies. Hosting the summit, King Abdullah committed $300 million to research climate change, while OPEC leaders pledged to cut emissions from oil and gas production.
The dollar's 10 percent decline this year has cut the buying power of revenue from record oil prices above $90 a barrel. A further drop may harden OPEC's reluctance to raise supply in a bid to ease prices. Ministers at the summit said the oil market was well-supplied and recent gains were due to speculation and beyond the group's control.
As long as the dollar stays this weak, oil will not drop significantly. I don't see how the Feds can even consider further rate cuts. The best help the American consumer can get is a drop in gas/heating oil prices, and cutting another 25 basis points would do more harm than good. After all, .25% will not do much for the average borrower, but a continued dollar plunge will definitely drive oil above 100 a barrel and that would be a disaster for the consumer.
Saudi Arabia, considering a revaluation of the riyal against the dollar, had to fight off an attempt by Iran and Venezuela to get the group to discuss pricing oil in different currencies. Hosting the summit, King Abdullah committed $300 million to research climate change, while OPEC leaders pledged to cut emissions from oil and gas production.
The dollar's 10 percent decline this year has cut the buying power of revenue from record oil prices above $90 a barrel. A further drop may harden OPEC's reluctance to raise supply in a bid to ease prices. Ministers at the summit said the oil market was well-supplied and recent gains were due to speculation and beyond the group's control.
As long as the dollar stays this weak, oil will not drop significantly. I don't see how the Feds can even consider further rate cuts. The best help the American consumer can get is a drop in gas/heating oil prices, and cutting another 25 basis points would do more harm than good. After all, .25% will not do much for the average borrower, but a continued dollar plunge will definitely drive oil above 100 a barrel and that would be a disaster for the consumer.
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