China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
CAD gained on stronger oil
2020-06-23 • Updated
The Canadian dollar started this week with the positive footing. What’s the reason?
Despite fears of the second coronavirus wave, the risk appetite has come back on the market as most countries are easing their lockdowns. In addition, most economic indicators turned out better than expected, what gave a clear signal to investors that the global economy is recovering. As a result, oil prices rose on encouraging prospects and increased oil demand. In fact, today crude oil prices reached levels unseen since the coronavirus outbreak. The commodity-sensitive Canadian dollar followed the overall flow and surged too. However, if oil prices get stuck at the current level of $40, there won’t be any motivation for the further CAD growth.
Recently, the US dollar has shown a downward trend. The World Health Organization published the record daily increase in new coronavirus cases on Sunday. Surprisingly, most investors preferred gold to the US dollar in search for the safe-haven investment. If USD continues following this trend, CAD will gain.
The USD/CAD met the strong support at the 200-day moving average at 1.3475. If it manages to break it down, it will clear the way towards the 3-months low at 1.3375. Nevertheless, if bulls get stronger, the pair will rise to the resistance at the week-high at 1.3630. The move above this level may push the price up to the 100-day moving average at 1.3780. Follow news and catch the market movement!
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.