The GBP / CAD pair showed some volatility at the OPEC + meeting on Thursday, but it has calmed down and now continues the lateral trend.
The British and Canadian markets are closed on Good Friday. So investors are focusing on oil prices.
The loonie is slightly bearish today while crude oil prices are falling. Brent is somewhat stable above $ 31, but WTI futures fell more than 7% to $ 23.
Mexico Rejects Production Reduction Proposal
Russia and Saudi Arabia have in fact reached consensus on record production reductions, which should support prices amid declining demand caused by the coronavirus pandemic. However, the agreement is in danger because Mexico does not want to comply with the proposed restrictions.
Mexico was the only participant to reject the proposed production cuts, OPEC said in an official statement. The cartel will not meet again today, but will move discussions to the G20 meeting scheduled later today and tomorrow.
The deal would cut gross production by around 10 million barrels a day in May and June. Saudi Arabia and Russia would each reduce their production to 8.5 million barrels per day, with the rest of the members agreeing to cut production by 23%.
Mexico has said it is ready to reduce its supply by 100,000 barrels per day, instead of the 400,000 barrels offered per day.
Despite this, OPEC should not abandon its initiative to limit production, as there is no alternative to support prices at the moment.
Aldo Flores Quiroga, the former Mexican Vice Minister of Petroleum, said:
“Mexico can and must join the international community to stabilize the oil market. Reducing production is both necessary and possible. It’s the responsible thing to do nationally and internationally. “
Amrita Sen, chief petroleum analyst at Energy Aspects, suggested that Mexico shouldn’t be a barrier:
“Saudi Arabia and Russia had to cut anyway, and these cuts also allow them to gain political points. “
Canada reported yesterday that the unemployment rate jumped to 7.8%, as the market lost more than one million jobs last month. Economists predicted that the unemployment rate would increase to 7.2% while the number of unemployed would increase by 350,000.