USD Continues to Remain Strong Against CAD as Crude Oil Prices Continue to Fall

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Canadian Dollar: Crude Oil Under $40, GBP to CAD Exchange Rate Rallies 1.66pct

CAD Posted by Colin Lawrence on 9 Mar, 2020

The CAD exchange rates fell across the board on speculation that the OPEC meeting to discuss a price freeze won’t materialise. Brent crude oil price falls, sending the GBP/CAD rallying.International Benchmark Wobbles, Canadian dollar weakensMontreal Economic Institute Warns against Increasing Government SpendingBank of Canada leave interest rates on hold. Without the participation of Iran, an OPEC meeting to discuss an oil production freeze is unlikely to happen, according to several sources, weakening the Canadian Dollar as oil.

Canadian Dollar: Best Crude Oil Prices of 2020, CAD Exchange Rate in Rut

CAD Posted by Colin Lawrence on 7 Mar, 2020

An uptrend in oil prices saw the Canadian Dollar to pound exchange rate strengthen as Brent crude hit a three-month high. Canadian dollar fails to benefit from best oil prices in 2020.Brent crude oil price today has broken above $40 per barrel.Bank.

Oil Price: Goldman Sachs Warns Commodity Rally Could Be Short-Lived

GBP Posted by Colin Lawrence on 7 Mar, 2020

Our Research team bring you the latest on the pound sterling (GBP) in relation to the Russian Ruble, Japanese yen and the Turkish Lira. The Bank of England (BoE) has become embroiled in a row over its stance on the EU referendum after Eurosceptic.

Canadian Dollar Stays Strong as Brent Crude Oil Breaks $35

CAD Posted by Colin Lawrence on 16 Feb, 2020

This week the Canadian Dollar (CAD) exchange rate fluctuated against the Pound, Euro and US Dollar in response to oil price movements. Brent crude oil has once again broken above US$35 per barrel, keeping CAD strong against USD and the EUR. GBP.

Oil Prices Fall, British Pound to Japanese Yen, Russian Rouble and the Turkish Lira Gains Fizzle

GBP Posted by Colin Lawrence on 15 Feb, 2020

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In spite of muted trader sentiment, the Pound Sterling (GBP) has been making gains against the Japanese Yen (JPY) and the Turkish Lira (TRY) as global markets continue to rally. David Cameron’s hopes of securing the necessary consensus among.

Pound to Canadian Dollar: GBP-CAD Takes Advantage of Oil Price Glut

CAD Posted by Colin Lawrence on 8 Feb, 2020

Today’s Canadian Dollar (CAD) Exchange Rates have Reflected Investor Uncertainty after the Latest Oil Price Rout The British Pound rate rally caused by positive UK trade balance figures for December has unfortunately been short-lived today. While.

Best Canadian Dollar Exchange Rate Today? Oil + Gold Prices Dictate

CAD Posted by Colin Lawrence on 30 Jan, 2020

Today’s pound to Canadian dollar rate (GBP/CAD) predictions / fx forecasts for the new trading week. Last week saw very few direct Canadian economic publications, and as such the value of the Canadian dollar exchange rate (CAD) has been dictated.

Citibank Anticipates that the Canadian Dollar (CAD) will Decline: Will the current Oil Glut Continue to Swell?

CAD Posted by Colin Lawrence on 26 Jan, 2020

Forecasters at Citibank predict that the Canadian Dollar (CAD) will struggle in the medium to long term with falling oil prices weighing on demand. Having advanced in line with rising oil prices at the tail-end of last week, the Canadian Dollar was.

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Why the Price of Crude Oil Dropped in 2020

The oil industry is full of booms and busts. Prices typically rise during periods of global economic strength and as demand outpaces supply. Crude oil will fall when the reverse is true, and demand cannot keep up with growing supplies. Meanwhile, supply and demand are driven by a number of factors:

  • Changes in the US dollar
  • OPEC (Organization of the Petroleum Exporting Countries)
  • Production and inventory supplies
  • The global economy
  • Deals and treaties

Notably, 2020 offers an interesting example of how the five factors can conspire to send prices lower. At that time, the price of crude oil fell to less than half in less than a year, reaching lows that people had not seen since the last global recession. Many oil executives believed it would be years before oil returned to $100 per barrel. As of mid-2020, it looked as if they were right and some of the circumstances surrounding the 2020 drop continue to plague the commodity.

The Strong US Dollar

The strong U.S. dollar was the main driver for the price decline of crude oil in 2020. In fact, the dollar was at a 12-year high against the euro, leading to appreciation in the U.S. dollar index and a reduction in oil prices. That put the market under a lot of pressure because commodity prices are usually in dollars and fall when the U.S. dollar is strong. For example, the surge in the dollar in the second half of 2020 caused a sharp fall in leading commodity indexes.

Organization of the Petroleum Exporting Countries (OPEC)

Another leading factor in the sharp price drop of crude oil in 2020 is that OPEC, a cartel of oil producers, was unwilling to stabilize or otherwise “prop up” oil markets. Prices of OPEC’s benchmark crude oil had fallen a whopping 50% since the organization decided against cutting production at a 2020 meeting in Vienna.

Global Production

Crude futures declined in late-September 2020 when it became clear that oil stockpiles were growing amid increased production. The Energy Information Administration (EIA) reported on September 30, 2020, that U.S. commercial crude oil inventories rose by 4.5 million barrels from the previous week. At almost 500 million barrels, U.S. crude oil inventories were at their highest level in at least the last 80 years.

Total oil production by the end of 2020 was expected to increase to more than 9.35 million barrels per day—higher than previous forecasts of 9.3 million barrels per day.

The Economy

While supply became increasingly abundant in 2020, demand for crude oil was decreasing. The economies of Europe and developing countries were weakening, and at the same time, vehicles were becoming more efficient, which caused the demand for fuel to lag. China’s devaluation of its own currency suggested that its economy may be worse off than expected. With China being the world’s largest oil importer, that was a huge hit to global demand and caused a negative reaction in crude oil.

The Iran Nuclear Deal

Lastly, the Iran nuclear deal was a preliminary framework agreement reached between Iran and a group of world powers. The framework sought to redesign, convert and reduce Iran’s nuclear facilities. Iran was allowed to export more oil because the deal removed Western sanctions. Investors feared it would add to the world’s oversupply of oil, dragging it down even more.

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