With the Oil price hitting new high of $82 per barrel last month the focus is again on the impact of dollar weakness on oil prices. Last month also saw the US dollar falling to new lows against basket of currencies. So how is that the dollar weakness causes high oil prices. Theoretically oil prices are determined by three factors: Current supply in terms of output, especially the production quota set by OPEC. Oil reserves, including what is available in U.S. refineries and what is stored at the Strategic Petroleum Reserves. Oil demand, particularly from the U.S. (as estimated by the Energy Information Agency) With the US dollar being the currency of choice in global crude oil trade, dollar devaluation creates several problems for the world oil industry. Oil producing countries receive their oil revenues in US dollars but use other currencies to buy goods and services from  [...]