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Evacuations from oil rigs and platforms located in the Gulf of Mexico prompted by the approaching tropical storm Fay has allowed the price of crude to rise for the first time in the last few days. This region contributes almost one fifth of the oil production in the US and hence is strategic. The storm threat resulted in the evacuation of its workers by the Royal Dutch Shell and Transocean Inc., though the offshore activities of the companies remained largely unaffected.

This surge in oil prices is also seen as a result of overselling and hence is been seen as a time with buying opportunity. Prices which had initially fallen to as low as $113 .25 was later sitting pretty at about $115.35 by September. Fay is the third storm to hit the US shores in 2008 with a capability of handicapping the offshore oil and natural gas production of the United States. The New York oil futures as on 15 August was trading at $113.77 down almost 1.1 percent and had the same day witnessed a low of $111.34.

This region is not new to storms and has routinely witnessed rough weather which cripples the drilling of oil and the movement of oil tankers. This rise in oil prices is not seen as something which will hold on for long if the damage by the storm is only of a minimal degree. It is to be noted that in the month of July crude was trading at its all time high price of $147.27 per barrel. The Dollar has also reported a rise in its trading price against the Euro for the fifth consecutive week.

The Dollar has risen by 2.2% against the Euro as reported in the week gone. Citing the market fundamentals to be in “perfect equilibrium” Venezuela, a member of OPEC, confirmed that there does not seem any need to increase the outflow of oil in the market hence OPEC would not be increasing the output.

Tags: dollar, dollar rate, dollars, oil prices, us economy, us stocks

With the air thick with rumors of UK heading towards a recession the Pound continued with its downward spiral against the dollar to hit $1.85 effecting other major forex rates also. Reports issued by banks speculated stagnation in the British economy in recent times which would result in a dive in interest rates making deposits less attractive and loans more expensive.

This release of information caused panic amongst investors causing the Pound to crash. People are realizing that the same maladies have affected the British economy which recently took the US economy in a downslide. With the commodities like crude oil, metals, vegetable oil, wheat, rubber etc hitting an all time low and the dollar slowly showing signs of a fundamental strengthening, the investors are moving back to the dollar that they had recently shunned thereby resulting in a subsequent weakening of the Pound. But analysts are still hopeful of this anxiety ridden bubble to burst soon thereby heralding the Pound back to its previous acclaimed status in trading.

Tags: currency conversion, currency trade, dollar, foreign currency, pound