More Pain Ahead for Your Wallet

Motorists in the United States may have had some temporary relief in recent days, as the price of crude oil fell. However, on Tuesday, oil resumed its bull-run, as the price of Brent crude rose to nearly $117 per barrel. Simultaneously, the U.S. dollar depreciated against world currencies. The U.S. dollar index declined nearly half a percent. As oil is transacted using U.S. dollars, weakness in the dollar may trigger a corresponding increase in the price of oil. An increase in the price of oil might not bode well for the general U.S. economy. If rising oil prices affect the U.S. economy negatively, that may only work to weaken the U.S. dollar even further. Why is the dollar weakening in the first place? With renewed hope over a solution to Greece's debt problems, investors may be fleeing the safety of the dollar for potentially riskier assets in Europe and Asia. Also, continued questions over the debt ceiling and the federal government's solvency linger in the air. Traders looking to play rallying oil might consider United States Oil Fund USO. USO rallied 1.99% on the day and may continue to rally if the price of oil continues to rise.