Glance at this chart of the trade-weighted U.S. dollar, and note the swing highs and lows in the price of oil per barrel around each peak and trough. You can look up historical inflation-adjusted prices of oil in USD on this handy chart: Crude Oil Prices – 70 Year Historical Chart (macrotrends.net). (Click to enlarge) The correlation isn’t perfect, of course. Oil was relatively cheap between 1986 and 2003, due to a relative abundance of supply as Saudi Arabia and new fields ramped up production, with two periods of extreme price action: a brief spike higher in 1990 preceding the First Gulf War, and a collapse to $17 in the 1998 Asian Contagion financial crisis. Geopolitical crises, wars and supply shocks will move oil prices regardless of the value of the USD. That said, it’s clear that absent such shocks, there is a strong correlation between a stronger USD […]