Rates as of 0500 GMT

Market Recap

CAD was the big winner overnight and we dont have to go far to find out why. It seems to be the usual oil.

So lets then ask, why is oil higher? Two OPEC members are facing disruptions
Libyas state oil company said it may suspend exports from the Gulf of Sirte, which contains many of the countrys main ports, in the next three days amid a worsening political crisis. And Ecuador said oil output continues to drop after about 18 days of protests that shut wells and threaten to bring production to a complete halt. The two countries combined are currently pumping around 833k barrels a day bd.

Meanwhile, French President Macron said the UAEs leader confided in him that the UAE was already at maximum output and Saudi Arabia can only increase production by some 150k bd. This comes as quite a shock because according to generally accepted data eg Bloombergs figures, Saudi Arabia has 1.14mn bd spare capacity and the UAE has 1.19mn bd. These two make up 68 of what people thought was the spare capacity in OPEC excluding Iran. If those two dont actually have any spare capacity and Libya and Ecuador are nearly knocked out, then OPEC is maxed out already.

This chart shows what the market had thought OPECs spare capacity was.

We may find out more on Thursday, when OPEC meets. The group has already agreed to stick to their scheduled increase in supply for August, although its doubtful whether they can actually increase supply. The big question…