Weekly Energy
The National Bank of Canada | Sep 27, 2016 09:01AM ET
Last week was marked by volatility in crude oil prices. WTI began the week at USD 43.03/barrel, rising as high as USD 46.51/barrel on Friday and ending the week at USD 44.48/barrel. This volatility was due to several factors, including:
- Saudi Arabia said that it would reduce oil production (currently at 10.7 million barrels/day) in exchange for a commitment from Iran to freeze its output at current levels. Although the proposal did not lead to an agreement, the market will be paying close attention as OPEC meets with Russia on September 27th. If the meeting can lead to an agreement, oil prices could rise.
- Iranian oil production has risen significantly since the beginning of the year. Iran’s output in August was 3.62 million barrels/day, up 820,000 barrels since the beginning of the year. The country has a production capacity of 4 million barrels/day.
- Nigeria announced plans to resume exports of two types of oil: Qua Iboe and Forcados. Exports of these products have been limited for months due to rebel attacks. Emmanuel Ibe Kachikwu, the Nigerian Minister of Petroleum Resources, said that production should ramp up over the next few weeks following the negotiation of a ceasefire with rebel forces.
- Figures released on Wednesday by the U.S. Department of Energy indicated a 6.2-million-barrel drop in crude oil inventories. This news helped drive up oil prices.
Given the current volatility in the markets, we are encouraging our clients to leave orders with us to implement hedges on fuel in CAD/litre. Have a good week!
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.