Oil buying through a weak dollar

[bbqbillyuk]

Hello All,

I am completely new to trading but wanted to ask you guys this question:

If oil is traded in dollars and the dollar is very weak at the moment, why is it still expensive for the UK?
Don't we just convert our GBP to USD then go buy some oil? If USD was at $2 to £1 and oil was $80 per barrel then wouldn't it mean that we would really be buying oil £40 per barrel.
If this was the case then why does our petol pump prices keep rising when the GBP keeps strengthening? Surely it should be falling pump prices, no?

This probably sounds silly but please help me to understand.

Many thanks
Billy.

 

[grantx]

Billy,

That is a good question. I haven't the faintest, I'm afraid so I also await explanation (maybe some tax angle - domestic company/foreign earnings, etc.)

Grant.

 

[TheBramble]

Cost of product represents about 25% the retail sale price. The rest is duty, vat, retailer/delivery costs. Each time there is a price hike in crude, the price at the pumps increase and when crude falls back - the pumps don't. Go figure.

 

[grantx]

And when the price increases, the government's take increases through greater corporation tax, vat and import duty. Hence, no political pressure on oil companies. Trebles all round.

Grant.

 

[The Baptist]

Hello All,

I am completely new to trading but wanted to ask you guys this question:

If oil is traded in dollars and the dollar is very weak at the moment, why is it still expensive for the UK?
Don't we just convert our GBP to USD then go buy some oil? If USD was at $2 to £1 and oil was $80 per barrel then wouldn't it mean that we would really be buying oil £40 per barrel.
If this was the case then why does our petol pump prices keep rising when the GBP keeps strengthening? Surely it should be falling pump prices, no?

This probably sounds silly but please help me to understand.

Many thanks
Billy.

Th relative percent gain in Oil has far exceeded the relative depreciation of the Dollar to GBP..

GBP 1 - $ 1.75 to $2.08 a year and a bit ago 16.7%

vs

$25/40 oil barrel to $90 today 100++%