Crude oil in USD continues to fluctuate within the range established since December. While this zone has held for several months, a technical breakout is becoming more and more likely. Some of the headlines impacting markets:
- According to certain analysts, the main geopolitical risk for 2017 involves Iran. The country, which is now pumping 4 million barrels of oil a day, could soon be hit by stepped-up sanctions from U.S. President Trump. A return to sanctions could reduce world oil output by more than 2%. It should be noted that Barack Obama had lifted sanctions on Iran in January 2016, allowing the country to increase its oil exports.
- The largest oil export terminal in Libya was seized by the Benghazi Defense Brigades last Friday. This could have a major impact on the North African nation, which is trying to revive its oil production. The current situation is a testament to the instability of the recent increase in oil output to 700,000 barrels/day.
- In the USD/CAD pair, markets now believe that a U.S. key rate hike in March is a given, while only last week, the likelihood stood at 34%. This shift in the market has translated into a rising greenback against the loonie, driving up diesel prices in CAD/L.