Economy
Oil Market Reacts to Latest OPEC Demand Growth Forecast
By Adedapo Adesanya
The latest downward review of demand growth forecast by the Organisation of the Petroleum Exporting Countries (OPEC), a stronger US Dollar, and disappointment over China’s latest stimulus plan pushed the prices of crude oil grades higher on Tuesday.
Data showed that Brent futures were up 6 cents or 0.1 per cent to $71.89 a barrel and the US West Texas Intermediate (WTI) futures appreciated by 8 cents or 0.1 per cent to settle at $68.12 per barrel.
OPEC cut its forecast for global oil demand growth in 2024 and lowered its projection for next year, marking the producer group’s fourth consecutive downward revision.
The group said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million barrels per day forecast last month.
Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.
In the report, the oil cartel also cut its 2025 global demand growth estimate to 1.54 million barrels per day from 1.64 million barrels per day.
China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 barrels per day from 580,000 barrels per day and said diesel use in September fell year-on-year for a seventh consecutive month.
The group was to start unwinding the most recent layer of cuts of 2.2 million barrels per day from December but said on November 3 it would delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.
OPEC’s output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million barrels per day in October, up 215,000 barrels per day from September.
The International Energy Agency (IEA), which represents industrialised countries, sees demand growth of 860,000 barrels per day in 2024. The agency is scheduled to update its figures on Thursday.
The market still continues to look at China after it unveiled a $1.4 trillion debt package to ease local government financing strains but analysts said the plan fell short of the amount needed to boost economic growth.
Also, US President-elect Mr Donald Trump, who won the November 5 election, remains a factor for oil.
The former US president has threatened more tariffs on Chinese goods, showing a constant policy direction like during his first stint in power.
Also weighing on oil prices, the US Dollar rose to a four-month high versus a basket of currencies as investors kept piling into trades seen benefiting from Trump’s victory. A stronger greenback makes oil more expensive in other countries, which can reduce demand.
By Dipo Olowookere
The local stock exchange remained in the red on Friday after it further depreciated by 0.62 per cent due to panic sell-offs in some bellwether equities.
NAHCO lost 10.00 per cent to trade at N148.50, Royal Exchange depreciated by 10.00 per cent to N1.53, GTCO slumped by 9.97 per cent to N115.55, First Holdco dropped 9.84 per cent to quote at N55.00, and Neimeth slipped by 9.60 per cent to N28.12.
On the flip side, Deap Capital increased by 9.89 per cent to N4.89, RT Briscoe expanded by 9.62 per cent to N13.10, International Energy Insurance advanced by 7.43 per cent to N5.06, Jaiz Bank gained 7.14 per cent to sell for N9.00, and Living Trust Mortgage Bank rose by 5.26 per cent to N4.00.
During the session, the energy index chalked up 2.35 per cent, but this was not enough to lift the Nigerian Exchange (NGX) Limited when the closing gong was struck by 4 pm to signify the close of trading activities.
This was because the banking sector lost 4.41 per cent, the insurance counter shed 1.52 per cent, the industrial goods space declined by 0.71 per cent, and the consumer goods segment tumbled by 0.13 per cent.
Consequently, the All-Share Index (ASI) contracted by 1,463.45 points to 235,941.27 points from 237,404.92 points, and the market capitalisation retreated by M939 billion to N151.327 trillion from N152.266 trillion.
The activity chart was topped by Access Holdings, which posted a turnover of 65.0 million shares valued at N1.5 billion. Zenith Bank sold 35.2 million stocks worth N3.9 billion, Sterling Holdings exchanged 28.4 million equities for N217.8 million, UBA transacted 16.3 million shares valued at N650.7 million, and GTCO traded 14.0 million stocks worth N1.8 billion.
In all, investors transacted 440.4 million equities for N24.7 billion in 50,273 deals, in contrast to the 691.6 million equities valued at N116.9 billion traded in 50,025 deals on Thursday, implying an uptick in the number of deals by 0.50 per cent, and a decrease in the trading volume and value by 36.32 per cent and 78.87 per cent, respectively.
By Adedapo Adesanya
The Naira again depreciated against the United States Dollar by N7.16 or 0.53 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 19, to N1,370.46/$1 from the previous day’s N1,363.30/$1.
In the same vein, the Nigerian currency lost N9.07 against the Pound Sterling at the official market yesterday to trade at N1,814.76/£1 compared with Thursday’s closing price of N1,805.69/£1, and crashed against the Euro by N6.43 to settle at N1,571.50/€1 versus N1,565.07/€1.
Also, the Naira weakened against the greenback in the black market during the session by N5 to sell for N1,390/$1, in contrast to the preceding day’s N1,385/$1, and at the GTBank FX desk, it shed N3 to close at N1,376/$1 versus N1,373/$1.
The official market’s FX liquidity has been facing pressure over the last three trading sessions, contributing to a decline in the official exchange rate due to rising demand for foreign payments.
FX reserves rose to $51.03 billion, the highest level since January 20, 2009, according to data obtained from the Central Bank of Nigeria (CBN). The figure also represents the highest since the beginning of the year and under the administration of the current Governor of CBN, Mr Yemi Cardoso.
The latest figure underscores the steady strengthening of Nigeria’s external buffers, which continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.
Meanwhile, the cryptocurrency market was mixed, with Bitcoin (BTC) up by 0.8 per cent to $63,225.80 after trading activity was relatively subdued due to a US federal holiday, as the absence of stock and bond market activity led to quieter conditions across crypto markets, even though digital assets continue to trade around the clock.
Further, TRON (TRX) also gained 0.8 per cent to sell at $0.3230, Binance Coin (BNB) jumped 0.5 per cent to $579.84, and Ethereum (ETH) appreciated by 0.1 per cent to $1,704.23.
On the flip side, Ripple (XRP) declined by 0.9 per cent to $1.13, Cardano (ADA) shed 0.8 per cent to trade at $0.1611, Solana (SOL) fell by 0.1 per cent to $69.23, and Dogecoin (DOGE) slipped by 0.1 per cent to $0.0831, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Brent crude gained 66 cents or 0.53 per cent to sell for $80.38 per barrel on Friday after Israel and Hezbollah agreed on a ceasefire in Lebanon, though Iran set conditions for using the vital Strait of Hormuz.
Also, the US West Texas Intermediate (WTI) crude was up 94 cents or 1.23 per cent to $77.54 per barrel, amid light trading volumes due to the US Juneteenth holiday.
In spite of Friday’s gains, Brent was down about 8 per cent week-over-week, reflecting a significant easing of supply concerns in the wake of the US-Iran deal to end the war.
Gulf producers were preparing to raise exports after Israel and Hezbollah agreed to a ceasefire, which began on Friday.
Israel and Hezbollah agreed to halt fighting in southern Lebanon after days of escalating clashes threatened to derail the fragile US-Iran peace process, reducing the risk that the first major test of the agreement would turn into its first major failure.
At least four tankers carrying crude, oil products and liquefied petroleum gas (LNG) entered the Strait of Hormuz on Friday, heading for Iraqi Gulf ports. However, despite the uptick in activity, Iran signalled tighter control over shipping.
Iran’s Persian Gulf Strait Authority said “no vessel is permitted to pass through the Strait of Hormuz without a valid passage permit issued by the PGSA”.
Concerns also remain as a planned meeting between Iranian and American officials in Switzerland on Friday was postponed, with arrangements underway for talks in the coming days.
Iran’s Foreign Ministry said the meeting was no longer urgent because a memorandum of understanding on ending the war had already been signed digitally between the two sides.
Analysts expect the deal to release more than 85 million barrels of oil stranded in the Middle East Gulf into global markets. The agreement also includes the lifting of US sanctions on Iranian oil, which would add more supply.
However, recovery in flows of supply that transits Hormuz and production after the US-Iran deal could take several months.
On the demand front, the Organisation of the Petroleum Exporting Countries (OPEC) said in its 2026 World Oil Outlook that world demand will rise to 113.3 million barrels per day in 2030 from 105.1 million barrels per day in 2025.
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