Oil & Dollar and its Movement in Near Future

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Oil And DollarAnd

Its Movement In Near Future

Presented by : RamanKumar

Ravi Kumar

Ravi Datt

Richa Garg



Dollar

The standard monetary unit of the USand its dependencies, divided into 100cents

The word 'dollar' itself derives from theFlemish or Low German word daler

Adopted as the name of the US currencyunit in the late 18th century

In 1929, investors began trading in

currencies



US Dollar Index - USDX

This index started in 1973 with a baseof 100

This index is calculated by exchangerates of six major world currencies

Euro

Japanese yen

Canadian dollar

British pound

Swedish krona

Swiss franc



Current Exchange rates withDollar

American Dollar 1 USD(As on 10/7/2011)

Euro 0.7440

Indian Rupee 49.1450

Japanese Yen 76.6500

British Pound 0.6437

Aus Dollar 0.9789

Source : moneycontrol.com



India Rupee Per U.S. Dollar Currency

Exchange Rate

Past Trend, Present Value & Future Projection

Source : www.forecasts.org



Dollar Is Losing Value Over the Long-

term

The U.S. debt is over $14 trillion

The large debt could force the U.S. to raise taxes to

pay it off, which would slow economic growth

As more countries join or trade with the EuropeanUnion, demand for the euro increases

As the dollar loses value, investors are less likely tohold assets in dollars as they wait for the decline to

stop.



Crude Oil

Naturally occurring liquid composed mostly of

hydrogen and carbon

Usually found underground but can also be found

above ground in oil seeps or tar pits

Produce fuel for cars, trucks, airplanes, boats and

trains

Also used for a wide variety of other products

including asphalt for roads, lubricants for all kindsof machines, plastics for toys, bottles, food wrap

and computers.

It was traded as a commodity in 1981



Top World Oil Net Importers(Million Barrels Per Day)

Rank Country Year 2010 Year 2009 Year 2008

1. United States 9.6 9.6 11.0

2. China 4.8 4.3 3.9

3. Japan 4.3 4.2 4.6

4. Germany 2.3 2.3 2.4

5. India 2.3 2.2 2.1

6. South Korea 2.2 2.1 2.1Source : http://petroleuminsights.blogspot.com/2011/06/worlds-top-6-net-oil-importe



Top World Oil Net Exporters(Million Barrels Per Day)

Rank Country Year 2009

1. Saudi Arabia 7.6

2. Russia 7.3

3. Iran 2.5

4. United Arab

Emirates

2.3

5. European Union 2.1

6. Norway 2.1

Source : https://www.cia.gov/library/publications/the-world-factbook/rankorder/



Crude Oil PricesPast Trend Present Value & Future Projection

(US Dollars per barrel)

Source : www.forecasts.org/oil.htm



Oil price forecast Oil Demand

Global oil demand growth in 2011 is expected to be less than half that seen in

2010

OECD oil demand, which rose by almost 700,000 bpd (1.5%) in 2010, isexpected to stagnate again in 2011

Outside the OECD region, demand is also likely to be more muted than it was in

2010

Oil Production

Last year, Global oil inventories were drawn down at an average rate of almost630,000 bpd

non-OPEC oil production is expected to record another year of solid growth in2011

The cover provided by oil inventories fell from 74 days’ worth of forwarddemand less than 70 days at the start of 2011



The Dollar and the Price of Oil

The rapid rise in the price of oil andthe sharp depreciation of the dollar

are two of the most noteworthy

developments of the past year

The price of oil has increased by 85%

over the past 12 months, from $65 a

barrel to $120

During the same period, the dollar

fell by 15% relative to the euro and

12% against the yen



Since the dollar has fallen relative to

the euro, this would have containedthe rise in the price of oil

The rate of increase of the price of

oil in Euros during the past year waslower than the rate of increase indollars

The high and rising price of oil doescontribute to the decline of thedollar, because the increasing cost of oil imports widens the United States’

trade deficit



Relation between oil and dollar



Organization of Petroleum Exporting

Counties (OPEC) Intergovernmental organization of

twelve developing countries

Founded in Baghdad

Founded by five countries in September1960 by Iran, Iraq, Kuwait, Saudi Arabiaand Venezuela

OPEC headquarters in Vienna

Hosts regular meetings

Ensuring the stabilization of prices



Objective of OPEC

To co-ordinate and unify petroleumpolicies among Member Countries

To secure fair and stable prices for

petroleum producers

An efficient, economic and regular

supply of petroleum to consumingnations

And a fair return on capital to those

investing in the industry.



Member Countries

Country Region Joined OPECAlgeria Africa 1969

Angola Africa 2007

Ecuador South America 2007

Iran Middle East 1960

Iraq Middle East 1960

Kuwait Middle East 1960

Libya Africa 1962

Nigeria Africa 1971

Qatar Middle East 1961

Saudi Arabia Middle East 1960

United Arab Emirates Middle East 1967

Venezuela South America 1960



Recent Development

Oil down nearly 3% on jobs report,dollar (Sep3, 2011)

Benchmark crude fell $2.48, or 2.8 per cent, to finishat $86.45 on the New York Mercantile Exchangeafter the Labour Department said employers

stopped adding jobs in July

Oil below $82 on stronger dollar,growth concerns (Sep30, 2011)

As the dollar strengthened and doubts remainedabout the resiliency of the economic recovery andEurope's struggle with its debt crisis.

German lawmakers took a major step toward dealingwith Europe's debt crisis

C d il i li l th



Crude oil prices slip on slow growth,strong dollar (Oct3, 2011)

Friday's close to $77.61 a barrel, the lowestprice since the end of September 2010.

In Iraq, oil ministry spokesman Assem Jihad saidcrude output is now 2.9 million barrels per dayand on track to hit 3.0 million bpd by the end of the year

Rupee off highs; likely defensebuying drags (Oct7, 2011)

The rupee climbed down from its early high

At 3 p.m., the partially convertible rupee was at49.17/18 per dollar, stronger from Wednesday'sclose of 49.34/35

The index of the dollar against six majorcurrencies was at 78.577 points from 79.057previously



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Oil & Dollar and its Movement in Near Future