The devastating wildfires seen up in Alberta that stopped oil production have finally been put out, which has enabled oil production to restart in the region. No doubt the damage to the area and the effect on workers will mean it takes a little time for production to get back up to full production levels. No doubt the plants restarting my give the Loonie some rest bite.
CAD since the start of May has lost 4 cents due to the fires. This has come after reaching the strongest point for over a year against Sterling.
Oil prices up after inventory drop
The CAD could well make back some of its own strength as the US crude Inventory which was expected to increase by 0.5million this week from last has actually been reported to be down 3.4million. In a market that is massively oversupplied this information brought an increase of 2.9% to the barrel price.
Problems in Nigeria where militia keep attacking the oil infrastructure and port blockades in Libya have helped the price significantly. There is an expectation that both these countries will have problems to improve these situations quickly with the belief that within a month Libya’s production could be down to 0 barrels a day.
Should this happen I would not be surprised for the CAD to regain back some of its lost position from the last few weeks.
There is a fairly quiet end to the week with regards to data release, however with the CAD value being so centred on oil I believe there may be a drop in the GBP/CAD rate as the Loonie finds strength.