Oil leapt to a new high this afternoon, pushing equity futures down. The media find two causes: a fire in Norway and a weaker dollar. Neither cause stands up to much analysis. The fire started over 12hrs ago, and only impacts 90 kbpd, it does not look serious. 

If this caused oil prices to spike when Nymex opened, then we can assume that only US traders are moving the oil market around. Plausible, but not very compelling in these days of a global commodities rally. There is a symbiotic relationship between the dollar and oil, they do affect one another.

But everyone in the market agrees that the dollar is weak because of its trade balance, while oil is strong because of fundamentals. It thus makes little sense to blame the dollar for oil strength, particularly in a world where even oil exporters are suffering from inflation and want a stronger dollar and Asian currencies are steadily revaluing. The dollar-oil relationship starts with oil supply-demand, which merits a high oil price and weakens the US trade balance.     

 If the media is right today, then the weaker dollar alone will not hold up oil, this would be a time to sell.

Developed world demand is eroding, and emerging markets have adjusted their subsidies. They did not adjust them enough to fix the problem, but declared that further price rises from here will be passed on directly to consumers. so, demand will temper far quicker if prices rise from here. The opportunity to short oil is getting very close.