Is the Falling US Dollar behind Oil Price Rises?  

Jeff Vail has a look at the correlation between the sagging US currency and rising oil prices.

Let's look at two periods: before about March 10, 2008, and after about March 10, 2008.

Before March 10, 2008, there was a general (though not very convincing) correlation between dollar movement and oil price movement. We need to remember that correlation does not necessarily equal causation here, even if there are rational explanations for a potential causal mechanism. This correlation extends back into 2007 (not shown--chart begins about Jan. 1st, 2008).

After March 10, 2008, there is not a correlation between dollar movement and oil price movement. The dollar has remained relatively steady and constrained within a relatively narrow trading channel. During this same time period the price of oil experienced one of the most dramatic increases in history.