Exxon: Weak Dollar Adding $20 to Oil Prices (XOM, USO)

The weak dollar has definitely been a contributor to the rise in the price of gold.  And it is also partly responsible for some of the oil gains that took prices back over $80 per barrel before the recent pullback.  But Rex Tillerson, the CEO of Exxon Mobil Corp. (NYSE: XOM), has actually quantified this with an assigned dollar value to CNBC.  His take is that as much as $20.00 per barrel is tied to the weakness of the US Dollar.

Tillerson told CNBC all the data for this.  He noted strong supply, record oil inventories, and a soft market.  He also noted that high oil prices will have an economic impact.  As far as $20, Tillerson actually said $20 to $25 per barrel.  Full details can be seen at a CNBC transript.

We have been tracking these inventory levels ourselves, and the demand alone has just not ever come anywhere close to the currency effect in the price of oil.  You could always blame China buying up excess production (remember, OPEC does cheat on quotas).

Unfortunately, investing in the United States Oil (NYSE: USO) does not always correlate to the exact underlying move in the price of crude.

JON C. OGG