From Marketwatch:
Supply glut? Worries about waning demand? All of these factors may have contributed to crude oil losing nearly two-thirds of its value since its peak in June 2014. But a chart tweeted on Monday by Charlie Bilello, director of research at Pension Partners, highlights another key factor swaying crude’s gyrations.
Bilello’s graphic shows that while oil is down more than 60% over the course of the past year and a half, the dollar—as gauged by the ICE U.S. Dollar Index DXY, -0.19% —has climbed nearly 17%. The data underscore a striking negative correlation between the dollar and crude futures CLK6, -2.31% which are priced in dollars. In other words, the stronger the greenback, the more expensive it makes oil to buyers using other monetary units.
