Economy
Oil Prices Surge on OPEC, IEA Demand Rebound Forecast
By Adedapo Adesanya
Oil prices rose more than $2 on Wednesday after the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) both forecast a rebound in demand over the course of next year.
Brent crude futures gained $1.88 or 2.3 per cent to $82.56 per barrel, while the United States West Texas Intermediate (WTI) crude futures were up by $1.82 to settle at $77.21.
OPEC, in its monthly oil market report, said it expected to see robust global oil demand growth in 2023 with potential economic upside coming from a relaxation of China’s zero-COVID policies, which this year have pushed the country’s oil use into contraction for the first time in years.
The cartel said it expects oil demand to grow by 2.25 million barrels per day over next year to 101.8 million barrels per day, with a potential upside from China, the world’s top importer.
“Although global economic uncertainties are high and growth risks in key economies remain tilted to the downside, upside factors that may counterbalance current and upcoming challenges have emerged as well,” OPEC said in the report.
In the report, OPEC nudged up its 2022 economic growth forecast to 2.8 per cent and left 2023 steady at 2.5 per cent. As well as the relaxation of China’s COVID policy, the report listed other sources of upside, including commodity price weakness.
This was augmented by the International Energy Agency (IEA), which also revised its oil demand growth forecast for both this year and next.
Despite an expected fourth-quarter contraction of global oil demand by 110,000 barrels per day compared to the same period in 2021, recent data on consumption in non-OECD regions have pointed to more resilient demand than expected earlier, the IEA said on Wednesday in its Oil Market Report for December.
The agency now sees global oil demand growing by 2.3 million barrels per day this year, up by 140,000 barrels per day compared to the growth expected in last month’s report. Demand growth in 2023 is expected at 1.7 million barrels per day, an upward revision of 100,000 barrels per day compared to the November estimates. Next year, global oil demand is set to reach 101.6 million barrels per day, the IEA said.
“Despite the seasonal slowdown in world oil demand and continued macro-economic headwinds, recent oil consumption data have surprised to the upside. This was especially apparent in non-OECD regions, including China, India, and the Middle East,” noted the agency.
“Strong gasoil use in key consuming countries outweighs weak European and Asian petrochemical deliveries,” the IEA added.
In supply, the IEA estimates that global oil supply fell by 190,000 barrels per day to 101.7 million barrels per day in November, breaking a five-month uptrend, as Saudi Arabia and other Gulf producers reduced output as part of the OPEC+ pact.
US Federal Reserve policymakers raised rates by 50 basis points later on Wednesday, slowing from the 75-basis-point pace they had stuck to since June.
This is the highest level in 15 years, indicating that the fight against inflation is not over despite some promising signs lately.
Oil prices have also been supported by a leak and outage of TC Energy Corp’s Keystone Pipeline, which ships 620,000 barrels per day of Canadian crude to the United States. Officials said the cleanup would take at least several weeks.
By Dipo Olowookere
Buying interest in consumer goods, energy and banking stocks further raised the Customs Street by 0.12 per cent on Thursday despite profit-taking in the insurance and industrial goods sectors.
According to data from the Nigerian Exchange (NGX) Limited showed that the banking index grew by 0.62 per cent, the consumer goods space rose by 0.15 per cent, and the energy counter increased by 0.06 per cent, while the insurance sector crashed by 0.93 per cent, with the industrial goods segment flat.
At the close of business, the All-Share Index (ASI) went up by 297.10 points to 245,209.34 points from 244,912.24 points, and the market capitalisation gained N191 billion to finish at N158.278 trillion compared with the previous day’s N158.087 trillion.
Eterna led the gainers’ log yesterday after it chalked up 10.00 per cent to settle at N36.30, ACA Capital improved by 9.63 per cent to N11.95, Legend Internet expanded by 9.52 per cent to N4.60, FCMB jumped by 8.55 per cent to N12.70, and Honeywell Flour surged by 7.98 per cent to N17.60.
On the flip side, Fortis Global Insurance led the losers’ chart after it shed 10.00 per cent to trade at N2.52, Ecobank declined by 9.99 per cent to N72.10, Chellarams depleted by 9.85 per cent to N11.90, Thomas Wyatt dipped by 9.83 per cent to N3.21, and UPDC slipped by 8.45 per cent to N3.25.
During the trading day, 531.8 million shares worth N20.5 billion exchanged hands in 44,826 deals compared with the 824.1 million shares valued at N25.5 billion transacted in 48,114 deals on Wednesday.
This indicated that the volume of trades was down by 35.47 per cent, the value of transactions depreciated by 19.61 per cent, and the number of deals decreased by 6.83 per cent.
The busiest stock for the session was FCMB, which traded 131.7 million units for N1.6 billion, First Holdco transacted 43.5 million units worth N6.0 billion, AVA Capital exchanged 36.3 million units valued at N432.0 million, Chams traded 36.3 million units sold 36.3 million units valued at N149.8 million, and Access Holdings ended with a turnover of 24.4 million units worth N638.8 million.
By Adedapo Adesanya
Brent crude rose by 3.83 per cent or $3.04 to $82.29 per barrel on Thursday after an information that an Iranian parliament committee was reviewing a bill that would ban US and Israeli vessels from the Strait of Hormuz.
Also, the price of the US West Texas Intermediate (WTI) crude futures went up by 81 cents or 1.05 per cent to $77.29 per barrel during the session.
Under the apparent draft, Iran would ban American and Israeli ships from transiting the strait. Other nations that have harmed Iran would not be allowed to transit until compensation is paid, according to the draft. Iran would impose penalties on violators equivalent to 20 per cent of the value of cargo aboard a ship.
Market analysts noted that crude traders remain focused on the US-Iran agreements, and the longer the delays, the more prices will fade back to the upside.
Iran has warned Gulf states that any new US attack on its territory would trigger attacks on critical energy infrastructure across the region.
Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.
Meanwhile, Yemen’s Houthis said they carried out missile and drone attacks on “Saudi deployments” in Marib and Hadramout in Yemen on Thursday. This has led to elimination of Saudi-aligned fighters as well as destruction of military camps, weapons depots and vehicles.’
Also, Iran and Oman appear to be close to agreeing on joint management of the Strait of Hormuz with Iran’s foreign ministry spokesman, Esmaeil Baghaei, saying the deal with Oman was “in the final stages.”
Saudi Arabia has slightly lowered the official selling price for its flagship Arab Light crude oil to Asia in September.
Elsewhere, a major oil refinery in Russia’s Yaroslavl region was on fire after a big Ukrainian drone attack. The President of Ukraine Volodymyr Zelenskiy said the country’s military had hit two Russian oil refineries – the Bashneft-Novoil refinery in the republic of Bashkortostan, and the Slavneft-Yanos refinery in the Yaroslavl region.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
