In the wake of a report stating that Iran intends to increase oil imports when economic sanctions are lifted, global oil prices plummeted by about 3 percent overall.
North America’s main oil blend benchmark price fell by over 3 percent, going for $37 per barrel on Monday. As a result, the Canadian dollar fell under 72 cents to the US dollar. West Texas Intermediate oil traded hands at $36.80 a barrel, falling 3.4 percent on the first trading day after last week’s mini rally.
A report stated that Iran intends to add 500,000 barrels of oil per day once sanctions on its trade are lifted as a result of the nuclear deal passed last summer. That just adds more oil to an already flooded market which has over 1 million barrels more oil everyday than the world consumes. The oversupply is keeping prices down as the buyer’s market is maintained.
The bad news for oil sellers is also bad news for Canada’s dollar. Canada’s currency is strongly linked to the price of oil.