Falling dollar puts pressure on Opec

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Subject Author Date Falling dollar puts pressure on Opec Don Tiberone 07-24-2007  Re: Falling dollar puts pressure on Opec Just A User 07-24-2007  Re: Falling dollar puts pressure on Opec ynotssor 07-24-2007
Posted by Don Tiberone on July 24, 2007, 10:23 am http://www.ft.com/cms/s/743a52a2-3959-11dc-ab48-0000779fd2ac.html Falling dollar puts pressure on Opec By Javier Blas in London Published: July 23 2007 22:01 | Last updated: July 23 2007 22:01 The falling US dollar is lowering the Organisation of the Petroleum Exporting Countries' purchasing power by up to a third, making the powerful oil cartel more reluctant to increase production and cut prices. Although oil is trading near last August's record $78.65 a barrel, Opec calculations show that, when adjusted for the weaker dollar and inflation, an average of the 12 Opec members' crude oil prices has fallen in the past year. The adjusted "Opec basket price" averaged only $43.60 a barrel in June compared with $44.30 a barrel in the same month last year, according to the organisation's latest monthly report. Growing trade between Opec members, especially in the Middle East and North Africa, and the European Union is aggravating the problem because the pound and the euro have risen. The dollar on Monday fell to an all-time low against the euro of $1.3844 and a 26-year low against sterling, at more than $2.06. Mohamed Bin Dhaen al Hamli, Opec president, said at its latest meeting three months ago that the cartel was "concerned about the continuing weakness of the US dollar" because "this is having a significant effect on the purchasing power of oil producing countries". Since then, the dollar has continued to fall against the euro and sterling. Eric Chaney, a Morgan Stanley economist, estimates that a 10 per cent drop in the dollar against major currencies cuts Opec's Middle East members' crude oil purchasing power by about 5 per cent. Adam Sieminski of Deutsche Bank said the refusal of the cartel to increase its production to force a drop in the oil price was "more understandable if the lower value of Opec's spending power...is taken into account". But the decline in the value of the dollar is insulating some countries from high oil prices, which provides Opec with strong demand even as oil prices soar above $75 a barrel. Non-Opec members, such as Egypt and Sudan, face similar problems to those of many Opec countries. Oil prices fell on Monday on speculation that Opec would increase production this year. Brent crude oil, regarded as the best indicator of the global oil market, fell 83 cents to $76.81. Posted by Just A User on July 24, 2007, 10:43 am Don Tiberone wrote: > http://www.ft.com/cms/s/743a52a2-3959-11dc-ab48-0000779fd2ac.html > > Falling dollar puts pressure on Opec > > By Javier Blas in London > > Published: July 23 2007 22:01 | Last updated: July 23 2007 22:01 > > The falling US dollar is lowering the Organisation of the Petroleum > Exporting Countries' purchasing power by up to a third, making the > powerful oil cartel more reluctant to increase production and cut > prices. If nothing else it would certainly make them want to sell more oil to other countries whose currency has a better value. Posted by ynotssor on July 24, 2007, 11:21 am >> The falling US dollar is lowering the Organisation of the Petroleum >> Exporting Countries' purchasing power by up to a third, making the >> powerful oil cartel more reluctant to increase production and cut >> prices. > > If nothing else it would certainly make them want to sell more oil to > other countries whose currency has a better value. Some time not too long ago there was an OPEC-based push to value oil in Eurodollars rather than the traditional USD ... I don't know whatever became of that effort. Similar Threads Posted Where to invest the falling US dollar? August 19, 2007, 11:45 am Falling dollar adds to investor woes November 11, 2007, 11:15 am debunking the decoupling myth:Oil, Gold, Corn Fall on Slower Economic Growth, Strong Dollar, ``Commodities are falling because of the realization that the economic downturn is spreading to Europe and Japan.``A spillover into Asia is becoming more likel October 2, 2008, 9:09 pm Re: Bush - "The sky is falling," "The sky is falling"!!! September 30, 2008, 11:56 am HWYI Dividend FAQ, $$2-$$$$4 dollar estimated based on 84 million dollar independent valuation November 2, 2006, 12:12 pm Re: France keeps up pressure on Hewlett-Packard jobs September 26, 2005, 11:01 am Re: France keeps up pressure on Hewlett-Packard jobs September 25, 2005, 8:30 pm Re: France keeps up pressure on Hewlett-Packard jobs September 26, 2005, 11:35 am Re: France keeps up pressure on Hewlett-Packard jobs September 26, 2005, 8:38 am Re: France keeps up pressure on Hewlett-Packard jobs September 25, 2005, 8:04 pm