Towards the OPEC cartel meeting, there seemed to be no agreement on a cut in production to curb the falling prices of oil. The member countries are committed to producing 30 million barrels a day and they basically produce even more. So, the prices of oil was on the slide towards the big event, with WTI trading below $75 and Brent below $80.
When the decision finally came out, on thin Thanksgiving trading, we didn’t see a “sell the rumor, but the factâ€, but rather an extended, accelerated sell off of the black gold. The dominant OPEC members and especially Saudi Arabia, are not happy with shale production in the US and with a lower price of oil, these expensive US projects are not so profitable, to say the least.
WTI is trading below $70 and Brent under $75, under $72 at the time of writing. Currencies of oil producing nations are falling.
USD/CAD had an immediate leg up immediately after the decision to above 113, and it is now extending its gains above 1.1370. The previous 2014 high of 1.1384 serves as resistance. The most recent high of 1.1468 is the ultimate line. For more lines, see the Canadian dollar forecast.
Also other oil producing countries see their currencies fall: Russia, Norway and Mexico are experiencing multi-year lows for their currencies against the dollar.
Here is how it looks on the chart:
