Economy

Crude Prices Bearish Despite OPEC Commitment to Production Cut

Published

4 years ago

20/10/2020

By Adedapo Adesanya

Oil prices couldn’t hold a position of strength on Monday even as the Joint Ministerial Monitoring Committee (JMMC) of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ reiterated their commitment to the production-cut agreement.

Brent crude went south by 46 cents or 1.07 per cent to $42.47 per barrel while the West Texas Intermediate (WTI) crude fell by 21 cents or 0.51 per cent to close at $40.17 per barrel.

Prices had briefly moved higher shortly after Saudi Arabia’s energy minister said OPEC+ will do what was necessary to rebalance the oil market.

Prince Abdulaziz bin Salman at a meeting on Monday said that the 23-country alliance has shown that it has the flexibility to adapt to changes in the oil market and will do what it considers necessary in the interest of all.

He explained that OPEC+ must comply with three key principles: “predict, prevent and be proactive” in the oil market.

He acknowledged, however, that OPEC+ still has work to do to get certain countries to fully compensate for past overproduction.

On the part of the alliance’s co-Chair, Russian Energy Minister, Mr Alexander Novak, said they were seeing a lot of uncertainties in the market, which is preventing the commodity from going back to pre-crisis levels. He also described current market conditions as a period of extreme volatility.

The committee isn’t a decision-making body but offers recommendations to OPEC on how to best balance the market. The next JMMC meeting will be held on November 17, and the OPEC conference and OPEC+ meetings will be held on November 30 and December 1.

A renewed rise in the COVID-19 cases and a stalling recovery of demand has prompted calls for OPEC+ to scrap plans to ease output cuts from 7.7 million barrels a day to 5.8 million barrels a day from next year but considering the situation on the ground, the market will likely have to wait for the full group meetings for any concrete decision.

Accelerating COVID-19 infections in the United States and Europe and the potential loss of energy demand pressured prices on Monday.

The global count of confirmed COVID-19 cases climbed above 40 million on Monday, while the death toll rose to 1.1 million. Several European countries have moved to increase restrictions on activities as the number of infections have risen while US infections fell below 50,000, the lowest in nearly a week, as deaths neared 220,000, according to reports.

On the supply front, Libya has increased its production to 500,000 barrels a day and exports to almost 400,000 barrels per day.

Economy

NASD Index Opens Week in Green Territory After 0.15% Growth

Published

2 hours ago

18/03/2025

Adedapo Adesanya

By Adedapo Adesanya

There was a 0.15 per cent appreciation at NASD Over-the-Counter (OTC) Securities Exchange on Monday March 17, with the NASD Unlisted Security Index (NSI) increasing by 4.90 points to close at 3,368.64 points, in contrast to last Friday’s 3,363.74 points and the market capitalisation of the bourse rose by N2.83 billion to settle at N1.945 trillion compared with the preceding trading day’s N1.942 trillion.

Okitipupa Plc gained N7.66 during the session to close at N307.66 per unit compared with the preceding session’s N300.00 per unit, FrieslandCampina Wamco Nigeria Plc expanded by 78 Kobo to settle at N39.01 per share versus last Friday’s price of N38.23 per share, and Geo Fluids Plc grew by 6 Kobo to trade at N2.90 per unit, in contrast to the previous trading day’s N2.84 per unit.

On the flip side, Afriland Properties Plc lost N2.01 to close at N21.19 per share compared with its previous rate of N23.20 per share.

Yesterday, the volume of securities traded at the bourse went down by 55.8 per cent to 288,383 units from the 652,237 units recorded last Friday, the value of securities traded by investor depreciated by 45.3per cent to N18.2 million from the N33.1 million quoted at the preceding session, and the number of deals executed at the first session of the week shrank by 27 per cent to 27 deals from 37 deals.

When the market closed for the session, Impresit Bakolori Plc remained the most active stock by value (year-to-date) with a turnover of 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 13.0 million units valued at N505.1 million, and Afriland Properties Plc with 17.4 million units sold for N357.0 million.

Also, Impresit Bakolori Plc remained as the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 69.9 million units sold for N23.7 million, and Afriland Properties Plc with 17.4 million units valued at N357.0 million.

Economy

Naira Depreciates 0.63% to N1,531 Per Dollar at Official Market

Published

2 hours ago

18/03/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated against the United States currency at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday by N9.61 or 0.63 per cent to settle at N1,531.98/$1, in contrast to last Friday’s value of N1,522.37/$1.

Similarly, the Nigerian currency weakened against the Pound Sterling during the trading session by N20.41 to quote at N1,984.61/£1 compared with the previous trading day’s rate of N1,964.20/£1 and against the Euro, it tumbled by N14.68 to sell for N1,668.46/€1 versus the preceding session’s value of N1,653.78/€1.

The depreciation trend continued after the exchange rate had appreciated just once over the last week as supply factors and the Dollar strengthening across the global market continues to impact other local currencies.

Nigeria’s inflation cooled to 23.18 per cent in February, a month after the National Bureau of Statistics (NBS) rebased its Consumer Price Index (CPI) to reflect changes in consumption patterns. A month earlier, the inflation was 24.48 per cent.

However, the the domestic currency appreciated against the US Dollar in the official market yesterday by N5 to quote at N1,585/$1 compared with the previous session’s N1,590/$1.

In the cryptocurrency market, most of the tokens fell as investors expect the US Federal Reserve to keep interest rates steady this week, with analysts saying policymakers might pause or stop the central bank’s balance sheet runoff.

There are also trade tensions and concerns around a slowdown in the US economy at a time when it is increasingly uncertain how much more accommodation the US central bank can offer.

Solana (SOL) slumped by 2.8 per cent to trade at $125.04, Litecoin (LTC) fell by 2.7 per cent to $89.70, Dogecoin (DOGE) lost 2.5 per cent to settle at $0.1673, Ripple (XRP) dropped 2.2 per cent to end at $2.28, Cardano (ADA) slid by 1.5 per cent to $0.7072, Bitcoin (BTC) crashed by 0.4 per cent to $83,103.91, and and the US Dollar Tether (USDT) went down by 0.03 per cent to $0.9998.

Conversely, Binance Coin (BNB) appreciated by 0.8 per cent to $634.55, and Ethereum (ETH) added 0.5 per cent to close at $1,907.25, while the US Dollar Coin (USDC) was flat at $1.00.

Economy

Crude Oil Rises as US Vows to Intensify Attacks on Houthis

Published

3 hours ago

18/03/2025

Adedapo Adesanya

By Adedapo Adesanya

Crude oil rose on Monday after the United States vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping, which is affecting prices.

As a result, Brent futures went up by 49 cents or 0.7 per cent to $71.07 per barrel and the US West Texas Intermediate (WTI) crude futures gained 40 cents or 0.6 per cent to settle at $67.58 a barrel.

The US carried out airstrikes that reportedly killed at least 53 people.

This is the biggest US military operation in the Middle East since President Donald Trump took office in January.

According to Reuters, the Red Sea port city of Hodeidah and the Al Jawf governorate north of the capital Sanaa were targeted on Monday.

Mr Trump said on Monday he would hold Iran responsible for any attacks carried out by the Houthi group that it backs in Yemen.

Meanwhile, the Houthi group said it would target US ships in the Red Sea as long as the country continues its attacks on Yemen.

Also, Chinese economic data buoyed hopes for higher demand.

Retail sales growth quickened in the world’s largest oil importer in January-February, indicating positive signs to boost domestic consumption.

However, unemployment rose and factory output eased.

Support also came as the US Dollar eased against a basket of currencies as investors worried about the economic fallout from President Trump’s protectionist trade policies.

A weaker Dollar makes oil less expensive for overseas buyers, boosting demand.

On the supply front, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) plan to raise oil output from April has also pressured prices.

However, market analysts noted that the prospect of tighter US sanctions against Iran more than offsets the gradual OPEC+ production increase.

The market will also looking forward to and to the Russia-Ukraine war as President Trump said he would speak to Russian President Vladimir Putin on Tuesday about ending the Ukraine war.