Canadian Wildfires Help Pare Oil ETF Losses on Saudi Arabia's Ministry Changes

Despite a halt in Canadian oil production, crude oil and related exchange traded funds slipped Monday as a stronger U.S. dollar and a change up in Saudi Arabia’s cabinet dragged on energy.

The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, fell 2.4% on Monday while the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, declined 3.3%.

Meanwhile, WTI crude oil futures were down 2.3% to $43.6 per barrel and Brent crude was 3.4% lower to $43.8 per barrel.

Oil prices declined on a strengthening U.S. dollar and changes in the Saudi Kingdom.

Related: Why Investors are Bearish on Oil ETFs

The USD appreciated after Federal Reserve Bank of New York President William Dudley reaffirmed that it remained a “reasonable expectation” that the Fed would raise interest rates two times this year, the New York Times reports.

Over the weekend, Saudi Arabia’s long-serving oil minister Ali al-Naimi was dismissed and replaced with Khalid al-Falih, chairman of state oil company Saudi Aramco, the Wall Street Journal reports.

“You’re going to see a much more robust Saudi Arabia going forward. There’s no question about it,” Capital founding partner John Kilduff told CNBC. “You’re going to see more action, direct action on their part going forward. It’s going to make a lot more volatility.”

Analysts believe Falih will likely maintain a policy of safeguarding the kingdom’s market share, even by contributing to the ongoing supply glut.

Falih “has made his opposition to unilateral cuts or freezing of production very clear,” analysts at the research firm Energy Aspects said in a note.