Thursday in Vienna, the Organisation of Petroleum Exporting Countries also known as OPEC are set to discuss the oil cut production which expires in March. Last December the leading nations that make up OPEC agreed to cut oil production in a bid to raise the price of oil. Oil prices plummeted from $120 per barrel to $50 per barrel from December 2014 to December 2016.
Reports are being released that the Russians could scupper a potential extension as energy Minister Alexander Novak was happy with the OPEC deal when the oil price was drifting around the $50 per barrel mark now that oil is above $60 and rising this may not be in there best interest as the Russians are looking to open more oil fields next year. OPEC are hoping to keep 1.8 million barrels of oil a day off the market.
Regular readers will be aware that oil is Canada’s largest export and any decision made by OPEC has a direct impact on Canadian dollar exchange rates. If the negotiations go well the Canadian dollar should have a strong finish to the week however if Russia announce they will not be complying with the extension I expect the price of oil to fall which would devalue the Canadian dollar.
If you are buying or selling Canadian dollars this week, month or year and I haven’t covered your currency pair I would recommend emailing me with the currency pair (CADUSD, CADGBP, CADAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you firstname.lastname@example.org. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.
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