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16 Mar 2015
Renewed slide in the price of crude oil impacting currency market - BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, comments that the resumption of the slide in oil prices have started to affect the commodity currencies such as CAD, NOK and RUB, with the recent IEA report supporting further weakness for currencies of oil exporters in Q2.
Key Quotes
“Currencies of net crude oil exporting countries such as the Canadian dollar, Norwegian krone and Russian rouble are coming back under renewed downward pressure in the near-term as the price of crude oil has resumed its slide lower after its recent modest rebound stalled.”
“The price of West Texas Intermediate crude oil has fallen to fresh low. In contrast, the price of Brent crude oil still remains above the lows from earlier this year.”
“The sell-off in the price of crude oil has accelerated after the release on Friday of a bearish report from the International Energy Agency.”
“The IEA boosted their estimates for US oil production this year as cutbacks in drilling rigs have so far failed to slow output. US oil supply is expected to expand by about 750k barrels/day this year to 12.56 million barrels/day up from an earlier projection of 12.41 million barrels/day.”
“The IEA warned that the ongoing build-up in crude inventories may soon test storage capacity limits which “would inevitably lead to renewed price weakness, which in turn could trigger supply cuts that have so far remained elusive”.”
“The report fits with our expectation for weakness in currencies of net crude oil exporters in Q2.”
Key Quotes
“Currencies of net crude oil exporting countries such as the Canadian dollar, Norwegian krone and Russian rouble are coming back under renewed downward pressure in the near-term as the price of crude oil has resumed its slide lower after its recent modest rebound stalled.”
“The price of West Texas Intermediate crude oil has fallen to fresh low. In contrast, the price of Brent crude oil still remains above the lows from earlier this year.”
“The sell-off in the price of crude oil has accelerated after the release on Friday of a bearish report from the International Energy Agency.”
“The IEA boosted their estimates for US oil production this year as cutbacks in drilling rigs have so far failed to slow output. US oil supply is expected to expand by about 750k barrels/day this year to 12.56 million barrels/day up from an earlier projection of 12.41 million barrels/day.”
“The IEA warned that the ongoing build-up in crude inventories may soon test storage capacity limits which “would inevitably lead to renewed price weakness, which in turn could trigger supply cuts that have so far remained elusive”.”
“The report fits with our expectation for weakness in currencies of net crude oil exporters in Q2.”