This article was originally published by Canadian Business.
Iraq, one of the world’s biggest oil producers, will increase its exports of the stuff by about 5% this week, Bloomberg reported over the weekend. State-run Northern Oil Co. worked out its differences with the Kurdistan Regional Government, the semi-autonomous authority that had closed the pipeline Northern Oil was using to get crude from three fields to market.
As one would expect, global prices slumped on the news. A three-week rally that saw West Texas Intermediate surge to more than $48 from about $40 at the start of the month ended unceremoniously on Aug. 22.
Noteworthy, however, was the reaction of the Canadian dollar: its value barely changed. That’s not what is supposed to happen. Everyone knows the Canadian currency is lashed to oil. When prices fell, the loonie should have descended. The tight link between the Canadian dollar and crude is broken.
Read the full story on Canadian Business.