- Oil is a key focus following weekend headlines.
- Spot prices, today, could be set to spike with the 59 handle in focus guarding the 60 handle and the April highs on the wide.
The price of a barrel of Oil is in focus and is a major driver in the FX space when it comes to the value of the Canadian dollar which has found demand on the Saudi Aramco news of late.
The price of oil is one to watch today following the WSJ reporting that it may take “up to eight-months”, rather than 10 weeks company executives had previously promised, to fully restore operations at Aramco damaged Abqaiq facility. This means that the crude oil shortfall will last far longer than originally expected and is likely to be a supporting factor for the Canadian dollar as well as risk-off markets today, especially when coupled with the uncertainties surrounding trade negotiations and recent comments from Trump who seems in no hurry to resolve the dispute before next year’s Presidential elections.
Rising tensions in the Middle East
There have also been reports in the WSJ this weekend that ‘Houthi militants in Yemen have warned foreign diplomats that Iran is preparing a follow-up strike to the missile and drone attack that crippled Saudi Arabia’s oil industry a week ago, people familiar with the matter said,” the article read.
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Saudi ForeignMin: If attack launched from Iran, it would be an act of war – CNN
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Yemeni rebels warn Iran plans another strike soon – WSJ
Meanwhile, Aramco is very busy seeking prices for the restorations following the attacks from contractors, including General Electric seeking emergency assistance, according to Saudi officials and oil-services suppliers in the kingdom. There is speculation that it could take some contractors up to a year to manufacture, deliver and install made-to-measure parts and equipment, a Saudi official said.
WTI and CAD implications
As for futures, West Texas Intermediate crude for October delivery lost 4 cents on Friday, or 0.07%, to finish at $58.09 a barrel on the New York Mercantile Exchange. The contract logged a 5.9% weekly advance, which was the biggest for the U.S. benchmark since the week ended June 21. Spot prices, today, could be set to spike with the 59 handle in focus guarding the 60 handle and the April highs on the wide up at 66.58 will be a key target.
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USD/CAD stays below 200-day SMA amid Saudi-Iran tussle, mixed trade headlines
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