So what does Greece have to do with the price of oil? Oil is a critical input to any industrial economy. Oil is traded on international markets in US dollars. If the value of any currency drops relative to the dollar then the cost of oil goes up in real terms for that country. Minor fluctuations in the price of barrel oil are expected and can be absorbed but any major fluctuation in currency value or in the US dollar price per barrel can have a huge knock on effect for producers. If the situation in Greece triggers a major correction in the Euro then European demand for oil will drop in the short-term. OPEC and the other oil producing nations are likely to increase supply in order to bring the price back down relative to the Euro but this could easily drive the dollar higher at the expense of US exports further dampening a sluggish US recovery. Article Source: EzineArticles/6356918
Posted on: Wed, 10 Jul 2013 01:46:35 +0000