Comedian W.C. Fields had great respect for the dollar and parted with one reluctantly. A friend once asked Fields for a loan, and he was told: “I’ll see what my lawyer says, and if he says yes, than I’ll get another lawyer.”

We could use a guy like that in Washington today, given the hoopla over the $1 trillion stimulus package being hotly debated in Congress. Yes, the actual numbers being cited are closer to $800 billion from the original $1 trillion, but Washington insiders know that Congress is highly skilled at returning to the scene of the crime and backfilling any money cut out of the stimulus.

When all is said and done, when interest, inflation, and other borrowing costs are factored in, the total cost to the taxpayer will actually be a lot higher than $1 trillion. But we’ll leave that issue to the economists.

What interests me today is how the stimulus package will impact oil prices.

Right now, oil prices are hovering around $40, but I bet that number goes up the closer we get to a stimulus bill, and then after that, watch out. Oil and commodity prices should rise to over $50 per barrel.

In fact, I’ll wager that the actually benchmark needed to figure out whether the stimulus bill is working is the price of oil. If it’s on the rise, the mega-spending bill is making its way into the economy. But if oil prices remain stagnant, then we have a $1 trillion albatross hanging around our neck (and doesn’t that sound appealing?).

It all comes down to historic economic downturns and the path such economies take back to robust growth.  Oil prices – all commodity prices, actually – vary greatly from other key economic indicators like employment numbers, gross domestic product, consumer sentiment, and the direction of the stock market. With the slight exception of the stock market, which factors in economic declines ahead of time and stock prices trade accordingly, most economic benchmarks are lagging indicators that signal events that have already occurred, not new ones that might occur.

Oil, like stock prices, are an indicator of the present and future health of the economy. That’s why those investment banks I wrote about a few weeks ago are storing tens of millions of barrels of oil on offshore storage tankers. They know that the economy can’t stay down forever, and they will make a big profit when the economy improves, oil prices rebound (mostly from higher consumer and business demand), and bulging oil inventories can finally be drained.

Another sign of the stimulus package’s impact on oil prices are the positive murmurs emanating from OPEC, which seems to be lining up its oil strategy to coincide with an expected global economic rebound.

Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore, told the Associated Press last week that OPEC was impressed by how solidly oil prices held up in a week where the U.S. economy shed 600,000 jobs.  "Considering the staggering magnitude of the jobs data, oil held up quite well," he said "The downward momentum in oil pricing appears to have been broken as the $40 level has proven to be a very strong support level."

With support levels in place, OPEC looks like it’s betting on a stimulus package being passed, and consumers and businesses slowly getting back to the business of spending as credit loosens, toxic assets are dried up at U.S. financial institutions, and happy days are here again. "OPEC's compliance with production cuts has held up well, and they appear prepared to make further cuts if prices drop," Shum adds. If so, then look for OPEC to get bullish on oil prices and cut supplies even further at its next meeting in March.

Even as the pork . .  . er . . . stimulus bill is being debated in Congress, oil prices have risen 7% in the past few days, as trader wade in and place their oil bets down that an economic rebound will follow and trigger higher demand for commodities, especially oil.

I’m not saying oil will rise back to $100 per oil anytime soon, but we should finally break out of the $40’s range we’ve been mired in, and that’s a move in the right direction.

As an American, I’m not sure about the long-term effectiveness of the stimulus plan. But as an oilman, the short-term impact should be a positive one.