Article Highlights

  • OPEC estimates oil surplus to reach 760K barrels per day from previous 720K forecast
  • OPEC says decline in non-OPEC output is becoming more uncertain
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With no major reports on deck, forex traders turned to the OPEC monthly oil report and crude oil prices for market clues.

Major Events:

OPEC monthly oil report – With the meeting between oil producers fast-approaching, forex market participants have been paying extra close attention to industry update and estimates. According to the March monthly oil report from the OPEC, the surplus is now expected to reach 760K barrels per day, higher than the earlier 720K barrels per day forecast.

On the other side of the equation, the OPEC also slashed its demand forecast for this year from 31.61M barrels per day to 31.52M barrels per day. In addition, the folks over at the oil cartel said that the expected decline of 700K barrels per day in non-OPEC output is becoming more uncertain.

Oil production: To freeze or not to freeze? – That is the question. So far, a few OPEC and non-OPEC nations have expressed their willingness to cooperate in a production cap but this still depends on whether or not Iran will participate. Last time I checked, Iran was still intent on boosting its oil exports to 4 million barrels per day.

All this back and forth has led to speculations that the meeting will be postponed to mid-April, as some nations such as Kuwait said that they never even got an official invite to this month’s huddle.

WTI crude oil dipped to a low of $36.65/barrel after opening above the $38/barrel level for the week. Brent crude oil fell to a low of $38.79/barrel after trading close to $41/barrel earlier.

Major Currency Movers:

USD – The Greenback took advantage of this dip in oil prices to rake in safe-haven forex flows. EUR/USD retreated to a low of 1.1078, GBP/USD fell back below the 1.4300 handle to a low of 1.4783, USD/JPY is still treading carefully below 114.00, and AUD/USD fell back below .7250.

CAD – The Loonie gave back some of its forex gains when crude oil weakened, although it still managed to advance against the euro and the Kiwi.

USD/CAD popped up to a high of 1.3308 before retreating to a low of 1.3257, CAD/JPY fell to a low of 85.41, EUR/CAD is consolidating above the 1.4700 mark, and NZD/CAD dropped from the .8900 resistance to a low of .8835.

Watch Out For:

  • 12:30 am GMT: RBA monetary policy meeting minutes
  • Tentative: BOJ interest rate decision (Check out Forex Gump’s predictions!)
  • Tentative: BOJ Governor Kuroda’s press conference
  • 4:30 am GMT: Japan’s revised industrial production (no changes expected from 3.7% preliminary reading)
  • 4:30 am GMT: Japanese tertiary industry activity index (0.4% expected, -0.6% previous)

See also:

Asian Session Recap

London Session Recap

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