Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/how-much-of-the-recent-rise-in Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter How much of the recent rise in oil price is caused by the decline of the dollar? Economy Jun 5, 2008 6:08 PM EDT Question/Comment: How much of the recent rise in oil price is caused by the decline of the dollar? Paul Solman: The easiest answer – but it’s a crude one – is the amount by which the dollar has declined in general: something like 30 percent against a trade-weighted basket of currencies since 2002. So if the dollar was still worth what it was back then, all else equal, oil should be selling for less than $100 a barrel today, instead of closer to $130 a barrel. At the pump, gas should be closer to $3 a gallon than $4. Meanwhile, the price of oil per barrel has more than quadrupled since 2002 and the price of gasoline roughly tripled. A free press is a cornerstone of a healthy democracy. Support trusted journalism and civil dialogue. Donate now
Question/Comment: How much of the recent rise in oil price is caused by the decline of the dollar? Paul Solman: The easiest answer – but it’s a crude one – is the amount by which the dollar has declined in general: something like 30 percent against a trade-weighted basket of currencies since 2002. So if the dollar was still worth what it was back then, all else equal, oil should be selling for less than $100 a barrel today, instead of closer to $130 a barrel. At the pump, gas should be closer to $3 a gallon than $4. Meanwhile, the price of oil per barrel has more than quadrupled since 2002 and the price of gasoline roughly tripled. A free press is a cornerstone of a healthy democracy. Support trusted journalism and civil dialogue. Donate now