This is a rather simplistic explanation but it captures the big picture:
The dollar fell to a three-year low against major currencies on Thursday on the Federal Reserve's intention to keep interest rates near zero. As a result it takes more dollars to purchase imported goods. With domestic off-shore oil production still curtailed as a result of last year's Deepwater Horizon accident and a reduction of Alaskan oil exploration, the U.S. is more reliant on imported oil.
Add to that, increased energy demand as the global economic recovery gains traction, all of it results in higher oil prices for the U.S. consumer.
No comments:
Post a Comment