Canadian Economy Continues Faltering

As quickly as the OPEC supply cut advantages evaporated, so did the prospects for the Canadian economy. Yesterday, the Bank of Canada decided to keep its rates unchanged at 0.5%. The report also shows that Canadian companies have failed to increase exports. Record household debt is also weighing down on the general economic situation, and job figures show that 90% of new jobs created are part-time jobs.

Can Raw Materials Rescue Canada?

The Canadian economy is not as diversified as it should be. It depends on the US market for about ¾ of its exports, and raw materials are still its main export. Manufactures are constantly declining despite the favorable exchange rates. Canada’s only hope given Trump’s victory, is for the Keystone XL pipeline projects to go ahead as planned, in order to reduce the costs of getting Canadian oil to markets. read more…

OPEC Deal Will Crash Eventually

The price of oil has been climbing quite quickly since OPEC announced that its members reached a deal last week to cut oil production. Russia has joined OPEC and it will cut production by 300,000 barrels per day as well. Nevertheless, as soon as WTI prices climbed above the $52 USD mark, they started to decline. WTI lost 1.2% of its value yesterday. This shows that the OPEC deal will not boost oil prices as much as its members need to balance their budgets and pay some of their debt down.

Why didn’t the Price of Oil Reach $60 USD After the Deal?

OPEC deal or not, no one can put the shale revolution genie back in the bottle. It is clear that even with the deal and with cooperation from important non-OPEC members such as Russia, oil prices will stay way below their 2014 prices. North American capacity doesn’t stop at shale either. read more…

OPEC Does It Again

Experts have been following every single development in OPEC production cut negotiations. Markets have been responding to information from these negotiations accordingly. Despite all the information about the possibility of the deal that is swinging the pendulum between oil price recovery and a renewed crash, the parties in the negotiation are effectively showing that they cannot reach a deal. Any analyst that pays attention to the geo-political interests and market share rivalries between these actors, would have put the odds against a production cut deal. This is what Trade Opus analysts have been arguing for a long time and it seems to be holding true.

OPEC is Divided

The first variable that underpins the likelihood of an oil production cut deal, is the relationship between OPEC members. The organization is far from being a monolith. In fact, it is probably one of the most politically divided international organizations. read more…

Dow Jones Closes Above 19,000 For First Time

The Trump rally reached another milestone on Tuesday. The Dow Jones industrial average closed above the 19,000 point line for the first time ever. It seems investors are still excited by the prospect of an industrial resurgence in the US under President Elect Trump. Banks are also edging higher on the promise that a Trump administration will do away with a lot of banking regulation, including Dodd-Frank.

Meanwhile the oil rally kept on going strong as well, in what seems to be contradictory. Trump has promised to go ahead with oil projects that Obama blocked, like the Keystone XL pipeline. This could increase the supply of oil at refineries and further the oil glut. read more…