Betfair Official Blog

Is Oil worth its weight in gold?

Will the oil-men strike gold, or will they just keep striking?

The price of oil is on the wane as expectation builds that Exxon will recommence production in Nigeria, following the resolution of a strike. The strike, eight-days long, played a huge part in the surging global oil-price hike after the company was forced to almost completely shut down production in Nigeria. In light of the latest positive news however, US light crude is down $2.53 at $110.46 a barrel. In London, Brent crude is $2.22 lower at $109.14. Such is the impact of Exxon's usual output of 80,000 barrels a day.

Oh for those bad, mad days when oil was trading in New York at almost $120 a barrel, and the head of Opec was talking of $200 a barrel. Those big oil prices were in evidence almost an entire, er, week ago.

Of course, oil went up not just because of industrial action in Nigeria. The real price-driver has been the weak dollar, encouraging investment into oil and other commodities.

Conversely, the strengthening of the dollar this week has prompted investors to shift out of the commodity, contributing to the downward trend of prices. But will it last? "It's all about the dollar," says James Cordier, of Liberty Trading Group to the BBC. "[And] I don't think the dollar is going to stay strong."

Can the dollar rally? And is it safer to have your money in dollars or in oil?