Economy
Nigeria Struggles to Meet OPEC Quota by 180,000bpd
By Adedapo Adesanya
For yet another month, Nigerian crude oil production fell in January 2022 as the country produced 1.5 million barrels per day, 180,000 barrels per day lower than what it is permitted to supply to the global market, though its production last month was the highest in five months.
Nigeria’s January output marked a recovery from the fourth quarter of last year when production was hit by a number of sabotage incidents and infrastructure issues.
The Organisation of the Petroleum Exporting Countries (OPEC), which Nigeria is a member, saw its crude production increase again last month but the group fell further short of its target amid dwindling spare capacity.
Under the OPEC quota, Nigeria is expected to produce 1.68 million barrels per day level.
Alongside its allies known collectively as OPEC+ raised output by 260,000 barrels per day to 37.94 million barrels per day in January.
This is 800,000 below the target for the month, according to a survey by Argus.
The group is finding it increasingly difficult to keep pace with its monthly 400,000 barrels per day hike in quotas as spare capacity tightens.
Argus estimates that the coalition’s spare capacity could drop as low as 3.8million barrels per day by the end of March.
OPEC members accounted for much of last month’s increase, with Mideast Gulf producers delivering some of the largest hikes. Saudi Arabia and the United Arab Emirates (UAE) — which hold most of the group’s remaining spare capacity — raised production by 100,000 barrels per day and 60,000 barrels per day respectively.
Russia and Oman were the only non-OPEC members of the group that managed to raise production last month.
Russia, which is fast running out of spare capacity, delivered a 90,000 barrels per day increase to take its output above 10 million barrels per day for the first time since April 2020, but it was still short of its January quota.
Several of the group’s large producers saw their production decline last month, including Iraq, where crude exports were constrained by adverse weather, and Kazakhstan, where protests briefly interrupted operations at the Tengiz field.
Of the three OPEC countries that are exempt from quotas, Iran was the only one to increase output in January. Firmer exports pushed Iranian production 30,000 barrels per day higher.
Talks to revive the 2015 nuclear deal and remove US sanctions on Iranian oil exports restarted this month.
After three months of consecutive gains, Venezuelan output dropped by 60,000 barrels per day in January. Venezuela has been importing Iranian condensate to dilute and upgrade extra-heavy crude from the Orinoco belt into an exportable heavy sour grade in recent months, but analysts note that the latest shipment was delayed, Argus noted.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange remained in the positive territory on Monday after it closed higher by 1.41 per cent at the close of business.
During the session, the NASD Unlisted Security Index (NSI) added 57.66 points to close at 4,141.53 points compared with last Friday’s 4,083.87 points, and the market capitalisation added N44.50 billion to settle at N2.477 trillion versus the preceding session’s N2.433 trillion.
Yesterday, the volume of securities went down by 60.7 per cent to 1.8 million units from 4.5 million units, the value of securities decreased by 79.3 per cent to N17.1 million from N82.5 million, and the number of deals dropped 38.6 per cent to finish at 27 deals compared to the preceding session’s 44 deals.
Closing the day as the most traded stock by value on a year-to-date basis was with Central Securities Clearing System (CSCS) Plc with 35.1 million units exchanged for N2.1 billion, trailed by Okitipupa Plc with 6.3 million units traded for N1.1 billion, and Geo-Fluids Plc with the sale of 122.8 million units valued at N480.4 million.
On the flip side, the most traded stock by volume on a year-to-date basis was Resourcery Plc with 1.05 billion units sold for N408.7 million, followed by Geo-Fluids Plc with 122.8 million units valued at N480.4 million, and CSCS Plc with 35.1 million units worth N2.1 billion.
On the first trading day of the week, there were three price gainers and three price losers led by FrieslandCampina Wamco Nigeria Plc, which lost N1.46 to quote at N110.00 per share versus the previous N111.46 per share, Afriland Properties Plc tumbled by 14 Kobo to close at N18.74 per unit versus N18.88 per unit, and Industrial and General Insurance (IGI) depreciated by 5 Kobo to close at 45 Kobo per share versus 50 Kobo per share.
The price gainers were led by MRS Oil Plc, which added N10.00 to trade at N210.00 per unit versus N200.00 per unit, CSCS Plc appreciated by N6.88 to N77.00 per share from N70.12 per share, and First Trust Mortgage Bank Plc gained 16 Kobo to close at N1.75 per unit versus N1.59 per unit.
By Dipo Olowookere
The hunt for dividend-paying stocks rebounded the Nigerian Exchange (NGX) Limited by 1.39 per cent on Monday after a spate of sell-offs last week.
According to data, energy equities were the toast of investors yesterday, with the sector closing higher by 4.68 per cent when the closing gong was struck at 2:30 pm on the stock exchange.
Further, the industrial goods space appreciated by 2.49 per cent, the consumer goods index improved by 0.36 per cent, and the banking segment appreciated by 0.26 per cent, while the insurance counter lost 1.49 per cent to profit-taking.
As a result, the All-Share Index (ASI) gained 2,687.46 points to finish at 195,514.23 points compared with the 192,826.77 points it ended last Friday, and the market capitalisation grew by N1.725 trillion to N125.488 trillion from N123.763 trillion.
NGX Group, which announced a final dividend of N2 and a bonus share of 1-for-3 last Friday, was the best-performing equity on Monday after it gained 10.00 per cent to trade at N136.40.
In addition, Aradel Holdings appreciated by 9.99 per cent to N1,192.30, Union Homes REIT grew by 9.96 per cent to N76.15, Sovereign Trust Insurance advanced by 9.95 per cent to N2.43, and PZ Cussons rose 9.72 per cent to N79.00.
On the flip side, Custodian Investment ended as the worst-performing equity with a 10.00 per cent loss to settle at N61.20, McNichols shed 9.92 per cent to N7.63, Africa Prudential depleted by 9.75 per cent to N16.20, Chams crashed by 9.11 per cent to N4.09, and Neimeth depreciated by 8.23 per cent to N10.60.
The most active stock for the session was Fortis Global Insurance with 109.1 million units sold for N109.2 million, Japaul traded 54.7 million units valued at N218.9 million, UBA transacted 43.0 million units worth N2.1 billion, Access Holdings exchanged 30.7 million units for N799.4 million, and Oando sold 28.5 million units worth N1.3 billion.
In all, market participants bought and sold 789.9 million shares valued at N35.1 billion in 84,259 deals yesterday compared with the 823.8 million shares worth N34.8 million traded in 63,759 deals in the preceding session, indicating a decline in the trading volume by 4.16 per cent, and growth in the trading value and number of deals by 0.86 per cent, and 32.15 per cent apiece.
By Adedapo Adesanya
The gradual fall of the Naira against the United States Dollar continued on Monday after it further lost N14.63 or 1.07 per cent to close at N1,378.02/$1 compared with the N1,363.39/$1 it was traded at last Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEX). This was due to an insufficient supply of FX to meet the demand of customers at the currency market.
The Nigerian currency also depreciated against the Pound Sterling in the same market segment during the session by N9.65 to trade at N1,846.14/£1 compared with the previous trading day’s rate of N1,836.49/£1, and declined against the Euro by N3.76 to settle at N1,612.98/€1 versus the preceding session’s N1,609.22/€1.
In the same vein, the Nigerian Naira tumbled against the greenback in the black market yesterday by N5 to quote at N1,375/$1, in contrast to the previous value of N1,370/$1, as forex demand pressure gradually mounts.
The Central Bank of Nigeria (CBN) sold $200 million to boost the supply side and moderate demand pressures. For February, the CBN operated on both sides of the market, selling $225 million and purchasing $261.80 million. However, as FX demand continued to outpace available supply, pressure mounted further in the market.
Meanwhile, the research subsidiary of Coronation Merchant Bank said FX liquidity improved significantly last week. Total FX inflows into the official window rose to $1.07 billion from $648.20 million in the prior week.
Analysts maintain that the exchange rate is still trading within its projected N1,350 to N1,450 per Dollar band, dismissing panic concerns.
Meanwhile, the cryptocurrency market was bullish on Monday after macro shocks triggered repositioning across markets, and digital currencies benefited as some investors rotated back into risk.
After weeks of US military buildup and deadlocked nuclear diplomacy, the war with Iran increases the danger of a wider regional confrontation in a strategically vital economic corridor, adding to the risk gains for the market.
Ethereum (ETH) gained 5.5 per cent to trade at $2,050.07, Solana (SOL) appreciated by 5.2 per cent to $87.76, Bitcoin (BTC) added 4.9 per cent to sell for $69,322.35, Binance Coin (BNB) rose 3.2 per cent to $637.94, and Litecoin (LTC) expanded by 3.0 per cent to $52.39.
Further, Ripple (XRP) jumped 2.9 per cent to $1.40, Cardano (ADA) improved by 2.1 per cent to $0.2801, and Dogecoin (DOGE) increased by 1.9 per cent to $0.0946, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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