Oil Prices Rise as Trump Threatens to End Iran Deal; USD/CAD Remains in Mid 1.28s
Published May 7, 2018
WTI oil topped $70 this morning, marking its highest level since 2014.
Oil prices are surging on bets that the Trump Administration will pull out of a deal that eased sanctions on Iran in exchange for an end to their nuclear program. France and other US allies have pleaded with the US president to not cancel the ongoing deal brokered by former President Obama while Trump has threatened to renew sanctions that would hinder Iran from selling oil abroad, which in turn will push oil prices higher by restricting global oil supply.
The ongoing economic crisis in Venezuela is also boosting prices prompted by severe output disruptions in the South American nation; the number of active US oil rigs (834, the highest level since March 2015) has done little to slow down the oil bull run.
US stocks are pointing to a positive open this morning after a large rally on Friday brought on by a surge in the technology sector. Nearly 40 more companies will release earning reports in what will be the last big wave for first-quarter earnings season.
The US dollar remains near 2018 highs despite sluggish data on new US jobs and wage growth data. USD/CAD persists in the mid 1.2800’s as oil prices and trade issues continue to weigh on the loonie.
NAFTA talks will resume this week as trade officials from Canada, Mexico and the US are set to meet in Washington DC later today; discussions regarding rules of origin for auto parts and the dispute-resolution mechanism for trade issues continue to be the main issues for the multi-lateral trade agreement.