The Bank of Canada is widely expected to keep interest rates on hold in its monetary policy decision on Wednesday.

When the Bank of Canada last met, it raised its benchmark interest rate by a quarter point to 1.75 per cent. It was the fifth hike since last summer, further pushing up the cost of borrowing for Canadians.

In the statement it released at that time, the central bank removed the word "gradual" in reference to the pace of further rake hikes. Some analysts read into the omission to mean that the bank may raise its overnight lending rate more quickly to get to a more neutral level of between 2.5 per cent and 3.5 per cent.

"The Bank of Canada sounded pretty sure of itself when in hiked rates in October," wrote CIBC's Avery Shenfeld in a research note.

'That was then, this is now'

The odds of an interest rate hike today are at zero, according to trading in investments known as overnight index swaps. A little over a month ago, investors thought there was about a one in three chance of a hike in December, but data points since then have lowered the odds.

"That was then, this is now," Shenfeld wrote.

Since the central bank's last hike, oil prices — both West Texas Intermediate and Western Canadian Select — have fallen significantly.

The differential between WCS and WTI widened so much that Alberta's premier, Rachel Notley, called it a "crisis" and announced a temporary oil production cut to reduce the bottleneck of oil struggling to get to market.

Already, Notley's plan seems to be working.

Canadian crude has rallied, and its discount to WTI has narrowed to $24 a barrel as of Tuesday evening. That's less than half what it was a month ago.

Oil could affect rates in future

Still, if Alberta produces and sells less oil, that could factor into GDP — something the Bank of Canada watches closely.

"These plans will have a marked impact, both in Canada and Alberta," according to TD economist Brian DePratto.

He suggested the Bank of Canada could try to look through a temporary shock but said "the path of global oil prices is highly uncertain, and any negative developments may lengthen the curtailments and their economic impacts."

There is some relatively good news for the Bank of Canada to consider as well.

The revised free trade deal was signed by Canada, Mexico and the U.S. on Friday at the G20 summit — though it still needs to be ratified by the governments of all three countries.

And, U.S. President Donald Trump and his Chinese counterpart Xi Jinping on Saturday negotiated a temporary pause in a trade war between the world's two largest economies, though a relief rally on U.S. stock markets didn't last Tuesday.

Analysts expect to hear more on the the central bank's overall outlook from Bank of Canada governor Stephen Poloz on Thursday morning, when he gives a speech on economic progress and financial stability in Toronto.