2024.01.0813:46:00UTC+00Canadian Dollar Drops As Oil Prices Decline

The Canadian dollar fell against its most major counterparts in the European session on Monday amid falling oil prices, as news of sharp price cuts by top exporter Saudi Arabia and output increases announced by OPEC offset concerns around the risk of escalation in the Middle East conflict.

Top oil exporter Saudi Arabia on Sunday cut oil prices to Asian markets to their lowest level in 27 months amid competition from rival suppliers and concerns about supply overhang.

Saudi Aramco slashed the official selling price (OSP) for February-loading Arab Light to Asia by $2 a barrel from January to $1.50 a barrel over Oman/Dubai quotes.

Meanwhile, Reuters reported that output from the Organization of the Petroleum Exporting Countries, or OPEC, rose 70,000 barrels per day (bpd) in December to 27.88 million bpd.

Geopolitical tensions were also on the radar with U.S. Secretary of State Antony Blinken warning that the conflict in Gaza could "easily" spill over into a full-blown regional conflict.

Israel struck Hamas and Hezbollah terror facilities in Khan Yunis and Lebanon in overnight strikes, the Israel D?fense Forces said earlier today.

The loonie fell to 1.3398 against the greenback, down from an early high of 1.3344. The loonie may possibly face support around the 1.37 level.

The loonie touched 1.4679 against the euro, its lowest level since December 29. The loonie is seen finding support around the 1.48 level.

The loonie was trading at 107.82 against the yen. This may be compared to a previous 4-day low of 107.75. The loonie is poised to challenge support around the 106.00 level.

In contrast, the loonie climbed to 0.8939 against the aussie, up from an early 4-day low of 0.8988. It may find resistance around the 0.87 level.