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8/3/2019 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
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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
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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
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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
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India Rupee Per U.S. Dollar Currency
Exchange Rate
Past Trend, Present Value & Future Projection
Source : www.forecasts.org
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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.
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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
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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
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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/
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Crude Oil PricesPast Trend Present Value & Future Projection
(US Dollars per barrel)
Source : www.forecasts.org/oil.htm
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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
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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
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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
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Relation between oil and dollar
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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
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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.
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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
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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
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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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