Gulf Arab states are in talks to replace the U.S. dollar for oil

Commodity analysts don't see much change occurring in the near future. They point out that when the dollar is weak that oil prices tend to rise. Also, Bloomberg reports that the Saudi Central Bank Governor Muhammad al-Jasser has said The Independent report is completely incorrect.

The U.S. dollar weakened against the euro, with the euro trading at $1.4691 from $1.4662 and the dollar eased to 89.00 yen from 89.40.

Jonathan Cavenagh of Westpac in Sydney said: "Still this U.S. dollar negative news which is moving markets and shows that central banks not just in Asia are looking to diversify away from the U.S. dollar."

Finally, let's keep in mind that a country's currency tends to follow the strength of its economy. This move can be interpreted by other world countries who are looking at the weakness in the dollar as a sign that the U.S. economy is weak. The other key factor in the dynamics here is the huge debt burden that the U.S. is carrying. This also is a negative.

Should oil be priced by a basket of currencies or should the U.S. dollar remain the sole denominator for oil?