Danske Research discusses the oil prices outlook and projects further recovery ahead which should be CAD positive, keeping USD/CAD under pressure in Q1.
"The price on Brent crude rose above USD60/bbl yesterday. Oil prices are buoyed by improved risk sentiment in equity markets and OPEC+ production cuts beginning to take effect. Bloomberg survey data showed that Saudi Arabia, as announced, started to scale back production already in December.
We forecast Brent to average USD65/bbl in Q1 and thus look for the recovery to extend further," Danske notes.