US Dollar vs. Crude Oil

From the Wall Street Journal

Oil Tops $134 on Weakening Dollar By BRIAN BASKINJune 6, 2008 9:51 a.m.

Crude-oil futures jumped by more than $6, at one point passing $134, as the weakening dollar returned as a force moving energy markets higher.
Light, sweet crude for July delivery traded $6, or 4.7%, higher at $133.79 on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $4.70 higher at $132.24 a barrel.
Futures have surged more than $11 above Wednesday's settlement of $122.30 a barrel, with analysts citing the weak dollar as an excuse for investors who saw the downward correction as too deep to bid oil prices higher. The dollar fell Friday after the Bureau of Labor Statistics reported that the U.S. unemployment rate increased from 5.1% in April to 5.5% in May, the biggest monthly increase in 22 years. The euro recently traded at $1.5701, a seven-session high. Traders have bought oil as a hedge against the weakening dollar for months, though that trade had receded to the background in May, as the U.S. currency firmed against the euro. The dollar's dramatic move over the last two days has renewed the connection to oil, however.
"As has been the case for more than a year, a quick shift in the value of the dollar is capable of igniting a disproportionate swing in oil prices," wrote Jim Ritterbusch, president of Ritterbusch & Assoc. in Galena, Ill.