Over the past week, WTI oil has become entrenched in the 48-49 USD/barrel range. Diesel in CAD/L was trading at an attractive technical level with regard to the 200-day average.
- According to Saudi Energy Minister Khalid al-Falih, OPEC and its allies could renew their agreement to limit output in June if oil inventories remain high. More specifically, he stated that the cuts would be maintained until inventories fall below the 5-year average. OPEC members will meet on May 25 to rule on the production cut plans.
- Crude oil inventory levels in the United States fell by 237,000 barrels over the past week, which led to rising prices when the news was made public.
- Chinese refineries operated at a record level with regard to their capacity last week due to increased demand for petroleum products.
- Last Wednesday, the U.S. Federal Reserve updated its monetary policy and moved forward with an increase to its key rate. After the announcement, the greenback lost ground against the loonie, showing that investors had expected more from the Fed.
It should be remembered that a stronger Canadian dollar, all else being equal, reduces diesel prices in CAD/L. We therefore encourage clients to contact us to discuss fuel hedging strategies.
Have a great week!