The Canadian dollar rose 0.30 percent on Monday due to the rapid rise of oil prices after the end of the US waivers on Iranian crude. The announcement by the White House feed into one of the biggest factors driving oil prices as supply disruptions took crude 3 percent higher at the start fo the week. The loonie rose boosted by energy prices ahead of the Bank of Canada (BoC) on Wednesday. The central bank is not expected to change its interest rate at 1.75 percent, but there could be a case for more dovish language when it publishes its Monetary Policy Report and during the press conference with Governor Stephen Poloz.
Oil Rises After End of Waivers on Iranian Oil Exports
Oil prices rose after the White House is ready to end the waivers on Iranian oil. US sanctions were brought back after the US ended its support of the nuclear deal, but the waivers limited the impact on crude exports. The decision to put more pressure on Iran by using the sanctions to send oil pressures to zero. Supply disruptions in this case the sanctions against Iran and Venezuela added to the military actions in Libya to bring oil prices higher.
The OPEC+ agreement to cut production is scheduled to end in June, but taken into consideration that Iran, Venezuela and Libya were exempt from it, the group could be tempted to rise production to offset the disruptions to supply.
President Trump once again put pressure on Saudi Arabia and the rest of the OPEC to close the supply gap, but lately the US-Saudi relationship has not been as strong as it was in the past.
Saudi Arabia issued a statement aimed at keeping prices stable as it said it would ensure the availability of oil supplies. The effect of higher prices with the end of the production cut agreement could lead to an end to the OPEC+ just as US production is predicted to ramp up.