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Goodbye, Cruel World

Has the U.S. monetary policy of the Federal Reserve contributed to the high cost of oil?

The Fed has been keeping interest rates low, resulting in a weak dollar. Oil is priced in dollars. Has the lower Federal Reserve discount rate been a significant factor in the prices we see at the pump?
M60a3:

Do you know or understand 'Commodities Trading'?

Oil is a 'Commodity' and is traded in the 'Commodities Market' all around the world. Every major country has a 'Commodities' trading center that bids on oil. The Japanese, Chinese, USA, Europeans, etc bid on oil constantly. Whomever wants the oil the worst will bid the price up so they can get the oil their country needs. Countries like China have Billions of US Dollars to spend on oil and are willing to bid the higher prices using the money that Americans wanting cheap goods are sending them.

The Feds cannot control the price of oil. They never have and never will be able to do it. The last time they tried, I could only get gas on even numbered days, and then had to wait in lines for hours in hopes of getting my 10 gallon limit before the pumps ran dry. Also, because of Government interference the price of gas went from $ .35 to $1+ per gallon.

All of that happened because stupid Americans believed Congress and allow them to impose "Windfall Profits" taxes on the oil companies. It didn't take the people long to learn what a bunch of liars the Congress was. Now, Congress and Hillary wants to do the same thing again. Guess what? The Americans are just as stupid today as they were in 1974. They still believe the Oil Companies and the President set the price of oil and are cheating he people with high prices. So, over 60% want Congress to impose new 'Windfall Profits' taxes on them. The American people are so stupid that they don't understand that the 'Windfall Profits' tax is simply added to the price of a gallon of gasoline. So, the stupid Americans pay the tax to the oil companies who transfer it to the Government.

Every time a cow farts those traders bid up the price of oil because they think it was Iran setting off a Nuke.

MizLiz:

Last summer,China made contract for ten years,of supply of fixed prices,discounted,crude oil.

Goodbye, Cruel World:

Yes, I understand the commodities market and my question was not about Federal Government trying to control that market. Rather, it is about an unintended consequence of the domestic Federal Reserve monetary policy.

U.S. oil prices were stabilizing until the last Fed rate decision which was based upon the "crisis" in the subprime mortgage market. It exacerbated the dropping value of the dollar.

See my comments to Green153's answer.

Gbob_north:

They kept the rates down and foreclosures are aren't as high as previously estimated, things are hard right now, but they could be much worse, the Federal Reserve is actually handling things very well given the current situation.


If the rates go up, like democrats keep asking for them, foreclosures would go up, unemployment would go up, the dollar would go furthur down, and imports like oil would go up more.

Goodbye, Cruel World:

See comment under my question.

MizLiz:

Prices and supplies of retail nolead gasolines,has no direct relationship with policies of the Federal Reserve Bank.
Prices,in the global specialty and spot markets,the United States commodity financial markets,prices of crude oils,has no relationship to Federal Reserve Bank,monetary policy and interest rates.
The factors and reasons for the prices of crude oils,nolead gasolines,aircraft fuels,diesel fuels,home heating oil,are too many,and too far from anything that could be policies of the Federal Reserve Bank.
The energy industry likes this.

Goodbye, Cruel World:

With the low yields available for dollar investments, it is better to spend a dollar than to invest it. The currency of the oil trade is the dollar. (Iran recently made a a token effor to trade in other currencies but it is an ineffective effort.) Therefore, the OPEC and other traders demand more dollars to offset the ability to get a better return on the trade until they can unload their dollars.

Michelle:

Without sounding like a smart alec or restating what has already been answered, I will pose the following answer...
"Will you accept Hawaiian money for my purchase of your next book?"

Goodbye, Cruel World:

It would take a shipload of Hawaiian money and that is my point. As the dollar becomes worth less because one cannot get a good investment to park it, one must dump it (use it to buy something) or watch it continue to decline in value.

Michelle:

You can't compare apples and oranges. Money is a resource and oil is a commodoty.

Michelle:

Oh, how do I miss those golden nuggets...
As I reread your comment I noticed that you're talking about "dumping your money because you don't wish to watch it continue to decline..." and if that is indeed what you wish to do may I suggest a place to dump it? Let me know if you need my bank routing and checking number. ; ) I'd hate to see you continue to suffer like that.

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