OIL PRICES AND THE VALUE OF US DOLLAR: THEORETICAL INVESTIGATION AND EMPIRICAL EVIDENCE

This paper deals with the development of oil prices and the factors which have impact on these prices. The main objective of this paper is to identify the impact of movement of exchange rate of US Dollar on crude oil prices. To reach the mentioned objective we have had used theoretical and empirical analyses and methods such as regression model, Granger causality and structural models to identify to what the extent the oil prices depend on the value of US Dollar, as one of the factors influencing the oil prices in the international markets, particularly in the last two decades. We find that US Dollar has a significant impact on oil prices.