By Mathew Carr (CarrZee)
June 10, 2024: Crude Oil denominated in USD might rise as the currency drops because fewer countries demand it as they buy energy.
BRICS nations, a group that’s expanding in membership, are increasingly buying oil in their own currency … though it’s a trend that is progressing slowly.
Saudi Arabia for instance is selling more oil in prices in other currencies than the USD as of June 9, reportedly (I’ve not confirmed this).
I’m not predicting this change in the value of the USD will happen this week, yet it might happen over the next few weeks, years.
The lower importance of the petro dollar in energy markets is being debated on social media.
Lower demand for USD-based oil may mean decreased need for USD — as countries buy using other currencies instead.
The US push to steal sanctioned money from Russian taxpayers is making emerging countries wary of USD assets.
These are important changes in the structure of global energy and currency markets, as purchasers adjust the way they buy oil, petroleum and natural gas during the climate transition.
What do you think? Comments to me on LinkedIn and X, etc… please.
While a lower value for the USD will make it difficult to contain US inflation … and for US consumers …it may also speed the transition in North America toward cleaner fuels, electric vehicles…as high prices drive consumers toward more rational choices.
(Also don’t forget that EVs are curbing demand for oil on a global basis…so that’s placing downward pressure on oil prices.)
Indeed, while the people of the USA purchasing imports may suffer because prices rise in terms of their local currency …those US-based corporations with businesses outside the world’s biggest economy will benefit as the USD falls.
In other words those generating foreign currencies might do well … because higher non-US currencies will make US-denominated profits look higher. This may boost dividend payouts.
I don’t offer investment advice …but buying the stock of American companies with non-US revenue might be worth considering.
For average Americans, buying imports will probably become more expensive … so the rampant consumerism in that region of the world might become muted (and it’s about time) … by market forces … ahead of the presidential election in November…or beyond.
This does not necessarily bode well for President Biden….yet the new structure may take longer than four months to fall into place —- so not until the post-election period.
But the market trends are arguably a good thing in a world that needs a lower production of polluting products such as plastic goods. China’s exports might suffer.
The thin layer at the top level of the global oceans that absorbs CO2 is at grave risk as plastic and co2 pollution causes the acidification of water and harms the minibeasts that effectively eat carbon.
This process probably limits the amount of Co2 that can be absorbed by the world’s biggest carbon sink every year (the oceans). Remember, the earth is covered about 70% by oceans.
So … lower demand for products that are spilling damaging pollution into the oceans is no bad thing.
Everyone needs to invest in better water treatment. That’s potentially an investment trend worth considering. (Again. I don’t offer investment advice. Any trading ideas you get as you read my stories should be investigated via other sources of information.)
(More to come, smoothed language )
