Economy
Oil Prices Soar on Positive US Demand Outlook, Possible Rate Cuts
By Adedapo Adesanya
Oil prices soared on Thursday after data showed a stabilizing job market in the United States, fueling expectations that the Federal Reserve could begin to cut interest rates soon.
During the session, Brent crude futures went up by 52 cents or 0.6 per cent to $83.27 per barrel and the US West Texas Intermediate (WTI) crude futures increased by 60 cents or 0.8 per cent to $79.23 per barrel.
The number of Americans filing new claims for unemployment benefits fell last week, pointing to an underlying strength in the job market of the world’s largest oil producer and consumer.
If interest rates start dropping, it would stimulate the economy and boost oil demand.
This comes after the US inflation data for April fed market expectations for a September cut in interest rates, which could ease Dollar strength and make greenback-denominated oil more affordable for holders of other currencies.
US consumer prices increased less than expected in April as it rose 0.3 per cen last month after advancing 0.4 per cent in March and February.
In the Middle East, Israel’s tanks pushed into the heart of Jabalia in northern Gaza on Thursday while, in the south, its forces pounded Rafah without advancing, according to reports.
Ceasefire talks mediated by Qatar and Egypt are at a stalemate, with Hamas demanding an end to attacks and Israel refusing until the group is annihilated.
Meanwhile, the International Energy Agency (IEA) trimmed its forecast for 2024 oil demand growth by 140,000 barrels per day, widening the gap with the Organisation of the Petroleum Exporting Countries (OPEC) in terms of expectations for this year’s global demand outlook.
The agency said the lower 2024 forecast was linked to poor industrial activity and lower consumption, particularly in Europe, where a declining share of diesel cars was already undercutting consumption.
In its monthly report on Tuesday, OPEC stuck by its expectation that world oil demand will rise by 2.25 million barrels per day in 2024. The 1.15 million barrels per day difference is about 1 per cent of world demand.
Meanwhile, US crude inventories last week fell 2.5 million barrels, the Energy Information Administration (EIA) said midweek compared with a modest draw of 1.4 million barrels for the previous week and an unexpected decline of 3.1 million barrels for the week to May 10, as estimated by the American Petroleum Institute (API) on Tuesday.
Meanwhile, OPEC and its allies , OPEC+ is likely to hold its June 1 oil policy meeting online, rather than in its headquarters in Vienna as currently scheduled.
Commodity analysts have pointed out that OPEC+ has room to increase output by over 1 million barrels per day in the third quarter without upsetting global oil balances, meaning global markets can comfortably absorb the UAE’s production increase of 200,000 barrels per day.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited further suffered a 0.64 per cent decline on Thursday as the bears tightened their grip on the bourse.
For the second straight session, all the key sectors of Customs Street pointed south, with the energy counter down by 5.22 per cent. The insurance index slumped by 2.59 per cent, the banking space depreciated by 0.28 per cent, and the consumer goods segment moderated by 0.06 per cent, while the industrial goods sector was flat, though with a marginal fall.
As a result, the All-Share Index (ASI) contracted by 1,493.71 points to 233,580.83 points from 235,074.54 points, and the market capitalisation retreated by N959 billion to N149.888 trillion from N150.847 trillion.
Investor sentiment remained weak after a negative market breadth index, as there were 21 price gainers and 34 price losers.
Aradel and Deap Capital went down by 10.00 per cent each to N1,575.00 and N4.05, respectively. Trans-Nationwide Express fell by 9.90 per cent to N3.64, Regency Alliance slipped by 9.57 per cent to N85 Kobo, and C&I Leasing dipped by 9.48 per cent to N28.12.
Conversely, Red Star Express grew by 9.60 per cent to N24.55, Legend Internet expanded by 9.09 per cent to N6.00, Neimeth appreciated by 7.10 per cent to N8.30, Abbey Mortgage Bank rose by 5.45 per cent to N8.70, and Ellah Lakes improved by 4.65 per cent to N9.00.
Yesterday, market participants traded 393.7 million equities valued at N19.2 billion in 45,813 deals compared with the 488.1 million equities worth N20.9 billion transacted in 46,239 deals recorded a day earlier, implying a shortfall in the trading volume, value, and number of deals by 19.34 per cent, 8.13 per cent, and 0.92 per cent, respectively.
The most active stock for the session was Access Holdings with a turnover of 39.1 million units worth N896.2 million, Chams traded 24.5 million units valued at N96.5 million, Fidelity Bank sold 24.1 million units for N436.9 million, Sterling Holdings exchanged 23.8 million units valued at N182.2 million, and Zenith Bank transacted 18.9 million units worth N2.1 billion.
By Adedapo Adesanya
The Naira recorded a marginal gain of 43 Kobo or 0.03 per cent against the United States Dollar on Wednesday, June 25, in the Nigerian Autonomous Foreign Exchange Market (NAFEX) to sell for N1,380.11/$1 compared with the previous day’s N1,380.54/$1.
However, the Nigerian currency lost N3.21 against the Pound Sterling in the official market during the session to close at N1,818.84/£1, in contrast to Wednesday’s exchange rate of N1,815.63/£1, and against the Euro, it fell by N3.21 to trade at N1,566.84/€1 versus midweek’s value of N1,563.63/€1.
In the same vein, the Nigerian Naira depreciated against the Dollar at the GTBank FX deck yesterday by N3 to sell for N1,383/$1 compared with the preceding session’s value of N1,380/$1, and at the black market window, it remained unchanged at N1,395/$1.
Interbank FX turnover at the NFEM window surged by about 56 per cent day-on-day to close at $195.371 million from $125.588 million reported on Wednesday, according to data from the Central Bank of Nigeria (CBN).
The Naira continues to feel the impact of rising FX payments and a strong US Dollar amid a sharp slowdown in forex market interventions by the central bank, with more than six weeks of no support for the local currency.
Nigeria’s foreign reserves increased further to $51.142 billion, while oil prices continue to be held in the $70 range by developments in the geopolitical scene.
Meanwhile, in the cryptocurrency market, Bitcoin sank below $60,000 as more than $1 billion in crypto positions were liquidated over the past 24 hours, with longs accounting for $842 million of the damage. About 148,500 traders were wiped out. The largest single position was a $38 million bitcoin-dollar bet on Hyperliquid. It led at $489 million in liquidations and dropped 2.8 per cent to sell at $59,862.61.
Ethereum (ETH) crashed by 5.5 per cent to $1,554.57, Ripple (XRP) declined by 4.8 per cent to $1.03, Cardano (ADA) fell by 4.3 per cent to $0.1433, Dogecoin (DOGE) dropped 3.4 per cent to sell at $0.0745, TRON (TRX) slid 2.2 per cent to $0.3215, Binance Coin (BNB) slumped by 1.8 per cent to $561.34, and Solana (SOL) dipped by 0.3 per cent to $62.94, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Aduragbemi Omiyale
The gantry price of Premium Motor Spirit (PMS), commonly known as petrol, has been cut down by N50 to N1,125 per litre from N1,175 per litre by Dangote Petroleum Refinery.
The refinery confirmed this development via a statement on Thursday to newsmen.
Dangote Refinery described this downward review of the product’s price as a reflection of its ongoing commitment to ensuring price stability, improving affordability, and supporting Nigeria’s energy security objectives.
It further said it underscores its responsiveness to prevailing market conditions and its efforts to pass on cost efficiencies to downstream partners and consumers.
In the statement, the company said it remains focused on its broader mission of contributing to economic growth, enhancing fuel availability, and fostering a more competitive and sustainable petroleum sector in Nigeria.
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