If US interest rates increased, would oil prices go down.

[cppuddy]

Question? If US interest rates increased, would oil prices go down? Just woundering if it would be a good thing for interest rates to go up; so we could see gas prices drop. To me that would put more money in peoples pockets. ?

[Vincardog]

1. Oil prices will go down when we make it illegal to speculate in oil

[Spider Jerusalem]

4. How're you going to do that?

Most oil isn't traded in the US market.

[Vincardog]

7. Start with a financial transaction tax. Then make a law that whom ever trades in a commodity actual

has to take physical delivery of that commodity.

[Spider Jerusalem]

8. Fails to actually answer my question

the US pruduces 5.5 million barrels of oil a day of a world total of c. 87 million. The US market can't control the world price, and it's staggering arrogance to think it could.

[RUMMYisFROSTED]

2. You tell me.

[Bragi]

3. I don't think there's a strong correlation

I can see various scenarios in which interest rates go up and oil goes up with it, or not.
A central bank can't predictably use interest rates in isolation just to get a particular oil price outcome.

[mckara]

5. Oil Moves with Dollar Index Values

Oil prices will go down when the Euro goes down after the ECB announces their quantitative easing programs soon. US interest rate increases will send the dollar up also because it will create a greater demand for dollar denominated assets.
Whenever there are threats of defaulting banks in Europe, the United States or Asia, the dollar rises because CDSs use dollar denominated securities, as do most commodities including oil. It all stems from the dollar being the only world reserve currency.

[FarCenter]

6. Oil prices and gas prices would not drop much

Presumably an increase in interest rates would slow economic activity in the US. This would not necessarily be good, since growth is too sluggish to bring down unemployment now.

Slower economic activity in the US might bring down the WTI contract price for crude at Cushing, OK, but it would not have much effect on prices for the seaborne tanker trade in crude. This is much more correlated with the price for Brent crude, with adjustments for grade and distance from the UK.

The East, West, and Gulf Coast refineries consume crude priced relative to the international price, and a slowing of the US economy would not affect the international price very much. Developing economies are taking up a greater proportion of internationally traded oil and driving the price.

[DaveJ]

9. I would not count on oil ever going down

While I do not profess to be an expert, it is a simple matter of oil running out soon. Unless oil really comes from space aliens. That would be cool if that were the case and we didn't know it.

[Nye Bevan]

10. If the Fed raised interest rates, then yes, the price of oil in dollars would fall dramatically.

This completely unexpected action would significantly strengthen the dollar, pushing down the price of commodities like oil and gold.

However, raising rates would also send a signal that the Fed was tightening, and would make it even harder for businesses to obtain financing. The stockmarket would plummet and the likelihood of a double-dip recession would be much higher.

[applegrove]

11. Saw on CNN that with succession in Saudia Arabia a little murky, and the current

King in his late 80s, the price of oil would be really negatively affected by his demise. The price of oil could double!

[Dover]

12. Ought to go down now that we can tap into Libya's oil...n/t

[lonestarnot]

13. No oil is a finite commodity. We are running out of oil and time to adjust to an alternative.

[Selatius]

14. Nope. The Cartel known as OPEC would throttle production if oil prices nosedived.

Raising interest rates at the current time would do nothing but make it prohibitively expensive for businesses or anybody from taking out loans. The economy would likely slow down further in the face of high interest rates, unless the US gov't engaged in a massive jobs program at the same time to put people back to work, but that's not likely to happen as long as conservatives control the majority of seats in the Senate and House.

[ThomWV]

15. No. Any change in anything leads to an increase in oil prices - its traditional.