Dollar has Fallen more then Crude has risen

Posted by OscarNOW crude, dollar index, invasion, iraq, oil, turkey 1:50 PM

Crude reaches a ALL-TIME high in dollars.

Crude oil rose above $88 a barrel for the first time in New York on concern Turkey may attack Kurdish militants in Iraq and disrupt oil shipments.

Yesterday, prices passed the previous all-time inflation- adjusted record reached in 1981 when Iran cut oil exports. The cost of oil used by U.S. refiners averaged $37.48 a barrel in March 1981, according to the Energy Department, or $84.73 in today's dollars.

Crude-oil has also risen this year because the U.S. dollar declined against the euro, enhancing the appeal of commodities as an investment. A lower dollar makes oil relatively cheaper in the countries using other currencies. The dollar, which is up 0.3 percent today, has lost 12 percent of its value against the euro over the last 12 months.

In U.S. dollars, West Texas Intermediate, the New York- traded crude-oil benchmark, is up 44 percent so far this year. Oil is up 34 percent in euros, 38 percent in British pounds and 41 percent in yen.

OPEC members have said a falling dollar justifies higher prices because oil-producing countries sell oil in dollars and often buy goods in euros. The group will discuss the falling dollar when members meet on Dec. 5, Algerian Oil Minister Chakib Khelil said yesterday.

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