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It's all about dollar strength and currency pegs/stability. Oil exporting countries need to continue to export as much oil as possible to acquire the dollars n
by snake_plissken 11y ago
It's all about dollar strength and currency pegs/stability. Oil exporting countries need to continue to export as much oil as possible to acquire the dollars needed to (try to) maintain a peg or the stability of their currency. Or they can devalue and risk social instability once domestic inflation rises.
- kbutler 11y agoSupply and demand are more fundamental - the revenue needs of exporting countries prevent reduction of supply, while economic weakness around the world reduces demand. That weakness also strengthens the dollar, increasing the supply available for a given dollar amount. The cascading effect of speculators exiting the falling market further reduces demand.