Crude Oil 71.75 Crucial level_Break Upside Go LongThe U.S. Dollar And Oil Relationship Is Changing.
Historically, the price of oil is inversely related to the price of the U.S. dollar.
A barrel of oil is priced in U.S. dollars across the world. When the U.S. dollar is strong, you need fewer U.S. dollars to buy a barrel of oil. When the U.S. dollar is weak, the price of oil is higher in dollar terms.
The United States has historically been a net importer of oil. Rising oil prices cause the United States trade balance deficit to rise as more dollars are needed to be sent abroad.
The former still holds true today, the latter….not so much. Due primarily to the success of horizontal drilling and fracking technology, the U.S. shale revolution has dramatically increased domestic petroleum production.
In fact, the United States became a net exporter of refined petroleum products in 2011, and has now has become THE largest producer of crude oil overtaking Saudi Arabia and Russia!
