CAD under attack as oil tumbles after Trump tells OPEC to relax

Oil have fallen by more than -2% so far today, reversing earlier gains after U.S President Trump told OPEC producers to “relax” as prices were too high.

Brent crude oil futures are down -$1.43 at +$65.69 a barrel, having earlier risen to a 2019 high of $67.47. West Texas Intermediate (WTI) crude futures is down -$1.38 at +$55.88 a barrel.

“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” Trump tweeted.

U.S. crude oil production has hit a record +12M bpd, an increase of more than +2M bpd since early 2018. Exports hit a record +3.6M bpd this month. These record numbers are forcing other producers, especially in the Middle East, to start offering their crude at discounts.

Note: OPEC+ led cuts as well as U.S sanctions against Iran’s and Venezuela’s oil exports helped push oil prices to new 2019 highs last week.

Trump’s tweeted comments this morning follows a rally in crude prices in 2019 supported by a tighter supply outlook although they are still significantly lower than the peak of more than +$85 a barrel hit last October.

Loonie under attack

The commodity sensitive CAD has come under pressure ever since Trump tweeted his concerns at 06:58 am ET. USD/CAD has rallied form an overnight dollar low of C$1.3115 to trade atop of its intraday high of C$1.3155 and still looking to grind higher.

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell