Gulf States Deny Secret Plan to Dump Dollar

[Admiral Yi]

It's weird to see Fox pick up a store by Robert Fisk

It's weird to see anyone pick up a story by Robert Fisk.

[Alatriste]

What currency oil is priced in doesn't matter, what matters is whether the dollar remains the reserve currency of choice.

Not 100% correct... if the producers set oil prices in US dollars, as always, let's say at 90 USD, and then the dollar falls 3% in relation to the euro, buyers paying in euros enjoy a nice automatic discount. On the other hand, if euro falls, those buyers use dollars. Oil producers have their own reasons to be interested in that Chinese idea about a new international currency based in a 'basket' including at least euro and dollar.

And an international currency based in such a basket would be almost equivalent to introducing fixed exchange rates. For China and the Gulf states (and other countries with enormous amounts of dollars in their reserves) that would be a dream come true. 

[DGuller]

What currency oil is priced in doesn't matter, what matters is whether the dollar remains the reserve currency of choice.

Not 100% correct... if the producers set oil prices in US dollars, as always, let's say at 90 USD, and then the dollar falls 3% in relation to the euro, buyers paying in euros enjoy a nice automatic discount. On the other hand, if euro falls, those buyers use dollars. Oil producers have their own reasons to be interested in that Chinese idea about a new international currency based in a 'basket' including at least euro and dollar.

And an international currency based in such a basket would be almost equivalent to introducing fixed exchange rates. For China and the Gulf states (and other countries with enormous amounts of dollars in their reserves) that would be a dream come true.

Why do you assume that the price of oil will stay at $90 when the dollar drops?

[alfred russel]

What currency oil is priced in doesn't matter, what matters is whether the dollar remains the reserve currency of choice.

Not 100% correct... if the producers set oil prices in US dollars, as always, let's say at 90 USD, and then the dollar falls 3% in relation to the euro, buyers paying in euros enjoy a nice automatic discount. On the other hand, if euro falls, those buyers use dollars. 

Prices aren't set by producers at arbitrary prices, they are ultimately set by exchanges with sellers seeking the highest value.

[alfred russel]

Why do you assume that the price of oil will stay at $90 when the dollar drops?

Of course in the real world it wouldn't--it would go up (a part of the reason for the runup in oil prices was that our currency went into the toilet).

[Crazy_Ivan80]

And an international currency based in such a basket would be almost equivalent to introducing fixed exchange rates. For China and the Gulf states (and other countries with enormous amounts of dollars in their reserves) that would be a dream come true.

something that needs to be prevented in other words