Economy
Crude Oil Won’t Sell at $90 Per Barrel in 2023—Analysts
By Adedapo Adesanya
Some oil market analysts have projected that the price of crude oil is not expected to reach $90 per barrel this year due to factors such as a lower possibility of deeper supply cuts by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) and China’s record-high crude oil stocks.
Brent crude, which serves as Nigeria’s crude benchmark oil, has experienced more than a 5 per cent increase in the past month. This has been attributed to additional output reductions by OPEC+ members and concerns about aggressive interest rate hikes by central banks being eased by cooling inflation in major economies.
Analysts at Goldman Sachs, a leading global investment bank, believe that the market will shift into a deficit in the second half of the year, and as a result, prices could potentially move towards $86 a barrel.
The bank asserts that a significantly larger deficit of 3.3 million barrels per day would be necessary to drive crude prices back to the three-figure range. As such, Goldman Sachs believes it is unlikely that the 23-member alliance will cut production in order to raise prices to such levels.
The Energy Minister of the United Arab Emirates (UAE), Mr Suhail Al Mazrouei, said recently that current actions by OPEC+ were sufficient to support the oil market for now, and the group is “only a phone call away” if any further steps are needed.
OPEC+, which includes allies led by Russia, pumps around 40 per cent of the world’s crude. The group has been limiting supply since late 2022 to bolster the market.
On its part, JPMorgan recently cut its oil price forecasts for this year and 2024 as it sees the global supply growth offsetting a record rise in demand while inventory build-up lowers the risk of price spikes. The Wall Street bank revised its average Brent price forecast for 2023 to $81 per barrel from $90 earlier, and for West Texas Intermediate (WTI) to $76 a barrel from $84 previously.
JPMorgan oil market experts also lowered its 2024 price forecasts for Brent to $83 per barrel from $98 and for WTI to $79 a barrel from $94 earlier. Brent futures were trading around $75 a barrel on June 14, while US WTI crude was around $70 per barrel.
The US bank now sees global oil supply growing by 2.2 million barrels per day in 2023, surpassing projected demand growth of 1.6 million barrels per day.
“It is becoming increasingly clear that high oil prices over the past two years did exactly what they are supposed to do — incentivize supply,” JPMorgan said in a note. The world could consume a record-setting 101.4 million barrels per day of oil this year, led by unprecedented demand in China, India, and the Middle East, it added.
Goldman Sachs report also highlights the potential impact of US shale companies ramping up their output. As these companies have experienced a decrease in production costs, any potential cuts made by the alliance of 23 oil-producing countries could be undermined.
In early June, Saudi Arabia, the world’s largest crude exporter, announced that it would extend its voluntary output cut of one million barrels per day until August. Russia also plans to reduce its oil supplies by 500,000 barrels per day in August, in addition to the previously announced output reductions.
The OPEC+ group has implemented total production curbs of 3.66 million barrels per day, which accounts for approximately 3.7 per cent of global demand. These include a two million barrel per day reduction agreed upon last year and voluntary cuts of 1.66 million barrels per day announced in April.
Goldman Sachs points out that there is an increased awareness of the effects of high oil prices, with the energy crisis experienced last year leading to radical policies aimed at achieving net-zero emissions.
In March 2022, Brent crude reached nearly $140 a barrel due to fears of global energy shortages triggered by Russia’s invasion of Ukraine.
China, the world’s second-largest economy and top crude importer, is expected to play a significant role in crude oil demand this year. While China’s economy rebounded after the lifting of COVID-19 restrictions earlier this year, it experienced a slowdown in May, with weaker retail sales, manufacturing output, and a slowdown in the property sector.
Although China’s macroeconomic performance could improve, Goldman Sachs highlights that the country’s crude oil inventories are nearing record highs. As a result, if demand outperforms expectations, these inventories are likely to be drawn down substantially.
Analysts also said China’s pledge to boost its economy has improved sentiment in oil markets while fundamentals look increasingly bullish.
While the economic data from China and the US remain mixed, the fundamentals are increasingly pointing to a tighter oil market this summer.
Russian crude oil exports have shown signs of decline for a second consecutive week and are estimated to have sunk to a six-month low in the four weeks to July 16. Russia is preparing to cut 500,000 barrels per day off its oil exports in August, and shipping plans so far suggest that Russia could deliver on at least part of its pledge to reduce oil exports next month.
Saudi Arabia’s crude oil exports have also started to decline, to below 7.0 million barrels per day in May, for the first time in many months.
Crude shipments out of the world’s top exporter could further decline as Saudi Arabia is now cutting its production by 1.0 million barrels per day in July and August.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange opened the week with a 0.52 per cent rise on Monday, July 20, driven by renewed buying interest.
The volume of securities traded during the opening session surged by 6,663.3 per cent to 52.6 million units from the previous 777,002 units, and the value of securities rose by 200.9 per cent to N191.2 million from the preceding session’s N104.2 million, while the number of deals depreciated by 15.2 per cent to 28 deals compared to the preceding session’s 33 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion in trades, and Central Securities Clearing System (CSCS) Plc with 75.4 million units exchanged for N5.3 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
Yesterday, there were two price gainers and three price losers, led by FrieslandCampina Wamco Nigeria Plc, which slid by 66 Kobo to end at N141.15 per unit versus last Friday’s N141.81 per unit, Food Concepts Plc lost 24 Kobo to close at N2.31 per share versus N2.55 per share, and Geo-Fluids Plc declined by 17 Kobo to settle at N2.25 per unit compared with the previous closing price of N2.42 per unit.
Conversely, CSCS Plc chalked up N5.19 to close at N99.33 per share versus N94.14 per share, and Mass Telecoms Plc appreciated by 3 Kobo to sell at 35 Kobo per unit from 32 Kobo per unit.
As a result, the market capitalisation increased by N13.57 billion to N2.606 trillion from N2.593 trillion, and the NASD Security Index (NSI) gained 22.6 points to quote at 4,343.27 points, in contrast to the previous 4,320.67 points.
By Adedapo Adesanya
The Naira almost traded flat against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, July 20. It gained 7 Kobo during the session to sell at N1,380.11/$1, in contrast to last Friday’s value of N1,380.18/$1.
It also appreciated against the Euro in the same market window during the session by N1.64 to close at N1,575.95/€1 versus the preceding session’s N1,576.99/€1, but depreciated against the Pound Sterling by N2.93 to trade at N1,857.35/£1 compared with the previous trading day’s N1,854.42/£1.
At the GTBank forex desk, the Nigerian Naira lost N1 against the US Dollar to quote at N1,389/$1 versus N1,388/$1, and at the black market, it traded flat at N1,405/$1.
Data from the Central Bank of Nigeria (CBN) showed that interbank FX turnover settled at $266.2 million, 7.5 per cent lower than the previous close of $287.8 million. Also, the number of deals at the interbank FX market declined to 68 from 106.
Despite this, there are signals that the Naira has pillars that can prop up its stability. Updated data from the apex bank showed Nigeria’s gross foreign exchange reserves increased to $51.92 billion as of July 16, 2026, reflecting continued improvements in the country’s external position.
A slew of analysts predict further increases will lift the gross balance above $52 billion this week, the highest seen since 2009.
Also, there are expectations that the country will be able to boost remittances into the country to $1 billion on a monthly basis by the end of the year; this will help ease pressure on the FX markets.
Meanwhile, in the crypto market, Bitcoin (BTC) climbed to about $65,500, reaching a two-week high, as the semiconductor selloff that dragged crypto lower last week reversed and Asian chip stocks led a broad risk rally. It rose by 2.4 per cent to $65,676.01.
There was also support from five straight days of inflows into US spot Bitcoin ETFs totalling more than $600 million, marking the strongest stretch of institutional buying since mid-July.
Cardano (ADA) jumped by 8.3 per cent to $0.1756, Ethereum (ETH) grew by 4.0 per cent to $1,930.33, Ripple (XRP) improved by 3.9 per cent to $1.13, Solana (SOL) appreciated by 3.2 per cent to $78.34, Binance Coin (BNB) added 1.9 per cent to sell for $575.34, and Dogecoin (DOGE) expanded by 1.7 per cent rise to $0.0729.
However, TRON (TRX) declined by 0.1 per cent to $0.3261, and the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each
By Dipo Olowookere
Sustained bargain-hunting in local stocks further lifted the Nigerian Exchange (NGX) Limited by 1.12 per cent on Monday.
The buying pressure was across the major sectors of Customs Street, though the consumer goods space came under profit-taking, closing flat.
But the banking counter expanded by 3.14 per cent, the industrial goods index gained 2.82 per cent, the insurance sector increased by 0.25 per cent, and the energy segment soared by 0.08 per cent.
Consequently, the All-Share Index (ASI) surged by 2,721.83 points to 246,183.96 points from 243,462.13 points, and the market capitalisation went up by N1.755 trillion to N158.812 trillion from N157.057 trillion.
Custodian Investment and NEM Insurance chalked up 10.00 per cent each to sell for N75.90 and N30.80, respectively, BUA Cement rose by 9.98 per cent to N303.10, First Holdco improved by 9.95 per cent to N105.50, and FTN Cocoa advanced by 9.94 per cent to N9.29.
On the flip side, SUNU Assurances shrank by 10.00 per cent to N3.60, Tripple Gee slipped by 9.77 per cent to N3.51, ABC Transport tumbled by 9.62 per cent to N7.05 per cent, Abbey Bank crashed by 9.00 per cent to N9.10, and Coronation Insurance dipped by 7.69 per cent to N2.40.
The market breadth index was flat yesterday, as there were 31 price gainers and 31 price losers.
First Holdco led the activity chart during the session, with a turnover of 203.9 million shares valued at N21.5 billion. Access Holdings sold 190.7 million equities worth N4.8 billion, UBA traded 29.2 million stocks for N1.4 billion, Zenith Bank transacted 24.7 million shares valued at N2.9 billion, and Sterling Holdings exchanged 23.6 million equities worth N187.4 million.
When trading activities ended at 4 pm, investors traded 851.6 million stocks for N49.6 billion in 56,873 deals compared with the 685.9 million stocks valued at N42.7 billion transacted in 44,134 deals last Friday, representing a rise in the trading volume, value, and number of deals by 24.16 per cent, 16.16 per cent, and 28.86 per cent, respectively.
