Necessary Roughness

When OPEC decided not to boost production despite record high oil prices, it signaled the dollar’s loss of dominance in international trade.

Steve Mufson, writing for the Washington Post, notes that while oil prices have been climbing in euros, Canadian dollars, and yen, only the dollar is showing record highs.

Crude oil is priced in dollars. So when the dollar is falling in value against other currencies, the price of crude oil usually rises. Why? Because European and Japanese importers can still buy oil for the same price in their own currencies even if the dollar price rises. Oil-exporting countries also like higher dollar-denominated oil prices when the dollar goes down so that their revenues cover the same amount of goods purchased in countries other than the United States.

Check out the chart that accompanies the article. I wonder if people living near the border are crossing to buy gas.