eFXdata reports that MUFG Research discusses the oil outlook and sees a slim scope for a sustained oil price rally, and expects another correction lower in oil-related currencies such as CAD, NOK, RUB.

"Oil-related currencies have also derived support from the largest oil-supply agreement in history. The oil production agreement saw OPEC+ commit to i) reduce exports by 9.7m b/d in May and June; (ii) followed by a relaxation to 7.7m b/d in H2 2020, and to; (iii) 5.8m b/d between January 2021-April 2022. Meanwhile, other non-OPEC+ members are "committing" to "involuntarily" reduce output by 3.7m b/d. However, our oil analyst Ehsan Khoman believes that "the prospects of a sustained oil price rally are vanishingly slim". We maintain our view that the unprecedented oil price collapse is not yet over," MUFG notes.

"The recent rally in oil-related currencies such as the Canadian dollar, Norwegian krone and Russian rouble are built on shaky foundations and vulnerable to another correction lower," MUFG adds.