CAD Slides as Oil Tumbles on US Supply Maneuvers

The Canadian Dollar (CAD) weakened on Wednesday, with USD/CAD climbing to trade around 1.3820. The Loonie's decline is directly correlated with a sharp drop in crude oil prices, as energy markets prioritize oversupply risks over geopolitical friction.

WTI Drops on “Oversupply” Fears

West Texas Intermediate (WTI) crude extended its decline for a second session. The primary catalyst is the announcement that the United States intends to sell Venezuelan oil on the global market. This influx of supply is weighing heavily on sentiment, overshadowing potential disruptions elsewhere.

Geopolitics: A Muted Reaction

In a significant geopolitical development, US European Command confirmed the seizure of the Russian tanker “Bella 1” (renamed “The Sailor”) in the North Atlantic, citing violations of US presidential orders.

For USD/CAD traders, the correlation with oil remains the primary directional driver. With WTI struggling to find a floor, the pair looks poised to test higher resistance levels near 1.3850 unless Canadian domestic data offers a surprise boost.