According to the American Petroleum Institute (API), crude oil inventories are up some 14.2 million barrels over the past week, an increase more than five times analysts’ forecast of a rise of 2.5 million barrels. The price of West Texas Intermediate (WTI), which had already been falling since Friday, quickly lost an additional 2.5%. Not surprisingly, the news had an impact on the USD/CAD pair, driving it to its highest level since January 25. It should also be noted that Canadian export data released yesterday were mixed on the whole. Although the December trade balance saw the highest surplus since late 2014 at more than $920 million, export volumes were down 1.4%, limiting the CAD’s gains.
There is little in the way of economic news to watch this morning. In Canada, the main indicator of note will be January Housing Starts at 8:15. Economists expect a slight downturn with 197,000 compared to 207,000 in December. Next, at 10:30 official crude-oil inventory levels will be announced by the U.S. Department of Energy. A confirmation of yesterday’s API reading would very likely destabilize crude oil prices and by extension the CAD.
- Range of the day: 1.3130-1.3230
Have a great day! Xavier Villemaire