Submitted by Charles Hugh-Smith of OfTwoMinds blog, The energy boom directly reduces the number of U.S. dollars being supplied to the global economy, and that pushes the value of the dollar higher. The petrodollar regime--that oil is bought and sold globally in U.S. dollars--is easy to understand. It boils down to these two principles:
BAGHDAD – Since the U.S.-led invasion of 2003, Iraq has become one of the world’s top oil producers, and China is now its biggest customer.
China buys nearly half the oil that Iraq produces, nearly 1.5 million barrels a day, and is angling for a bigger share, bidding for a stake now owned by Exxon Mobil in one of Iraq’s largest oil fields.
The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it
INUVIK – The Northwest Territories is hoping a rise in demand for natural gas and a hike in prices will revive interest in the moribund Mackenzie Valley pipeline.
“We need a route out of the territory for our resources,” Premier Bob McLeod told a petroleum show audience Tuesday. “The Mackenzie Gas Project could be that route, and it has already been approved, so we would prefer to see that project move ahead.”
The U.S. shale energy revolution is making its mark on global financial markets. Since the beginning of last year, the U.S. has steadily pared its petroleum trade deficit, ramping up exports and tapering back imports of oil.