Never said that the dollar is THE factor. But is most definitely A factor. Always has been, always will be as long as the commodity is priced in dollars. There is plenty of supply at current usage BTW.
Tell that to the Chinese! There are some of the worst diesel fuel shortages the country has ever seen. Long queues of trucks and cars stretching over a kilometer long to just a get a ration of fuel, not even to fill up the tank. There is not plenty of supply otherwise these minor supply disruptions wouldn't cause the price to spike up $2.
i think its pretty obvious that fundamental factors such as the dollar and S/D determine oil price, to an extent, but im with those that think we're in a bubble. but more importantly, i think if your trying to out analyze the big money on fundamental factors your setting yourself up for failure. price action is a much better way to make money than fundamental analysis, as far as the little guy goes.
The Chinese problems are about infrastructure, not that they can't buy crude. Global supply problems are mainly with refineries, not the commodity itself. And, yes, just about anything can cause a $2 move in crude with the size of the players in that market. One hedgie hiccups, and they all follow suit. This is why you often see the market move both ways the same day with big volatility.
When it comes to crude it's not a supply and demand issue. There is currently plenty of crude to completely supply 100% of the refining needs. The declining dollar does play a small part in driving up the price but is NOT the big factor. So what is driving the price up so high? SPECULATORS! People sitting around a computer wanting oil to make them rich are the ones driving the price through the roof right now.
No way the dollars will bottom when the printing press is running at this pace. We will see 2 USD for 1 EURO next year.
Refineries will not buy crude oil if they can't sell the end product for a profit. In China, that is the case. Crude oil consumption in China is being artificially supressed because refineries don't make any money refining crude oil and selling below cost since China has price controls. So the demand is there, but due to rationing, they are artificially limiting crude oil consumption. Without the Chinese government's braindead price control policies, you would have crude oil much higher because the Chinese will sop up any excess supply at almost any price.
Crude oil consumption has only grown at 3% per year. That's a little tidbit oil bulls love ignoring. In the interim, crude oil has risen from $11 per barrel in 1998, and $55 per barrel in 2001. So, crude oil has risen on an aggregate basis of 100% per year for the last 10 years ($11 to $114), while consumption has increased 3% per year. I guess that's why oil traders love war, Nigerian kidnappings, hurricanes, pipeline breaks, and any other excuse to claim "the sky is falling!" And that also why they've literally been ordering oil, then telling the tankers to delay the delivery by a few days, so that reserves don't get too oversupplied. Those funny guys. There's a glut of oil, and any honest administration would have cracked down on the bullshit tactics the oil traders have used to literally steal tens of billions of dollars from the pockets of Americans for the last several years.