With the rising oil and gas prices and all the political hyperbole that is occurring I did some research.
June 2100 1 Euro = $1.19 . April 2011, 1 Euro = $1.45 (USD -28% change)
1 Pound = $1.44, 1 Pound = 1.65 (-14.5% change)
$1 US =$1.05 Canada , $1 US = $0.95 Canada(-10.5% change)
Oil Prices = $70 in June 2010 and $112 in April 2011 (60% increase)
Conclusion: 25 to 50% of the price increase in Oil is due to loss of value of the US dollar in the world financial system
From the US Energy Information Agency
http://www.eia.doe.gov/steo/
World Oil Production will increase by 650,000 barrels per day
World Oil Consumption will increase by 1,500,000 barrels per day
2010 usage was about 85,000,000 barrels per day.
This is 1% less supply than demand in 2011 vs 2010.
This is the same government agency predicting average gas price in the US for April 1 to Sept 1 to by $3.86 a gallon so this data can only be suspect, but it is what it is since gas prices are already at this level.
Conclusion:
Weakening dollar (and predictions are this will continue) and decreasing supply relative to demand for Oil is setting up a situation where Energy prices will increase dramatically.
Why would someone sell something today when tomorrow it will bring more dollars just due to currency fluctuations?
