Economy

Oil Prices Rise as OPEC+ Retains Initial Supply Cut Deal

Published

5 years ago

16/07/2020

By Adedapo Adesanya

Crude prices reacted positively to the news of the decision of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies known as OPEC+ to reduce the global crude supply by 7.7 million barrels per day initially agreed when the deal was signed in April.

On Wednesday, an OPEC committee held a virtual meeting, where talks about the possibility of extending the reduction of crude production by 9.7 million barrels per day till August came up.

In April, when prices were down, oil producers held a meeting and it was agreed that supply should be reduced by 9.7 million barrels per day in May and June and then by 7.7 million barrels per day from July to December.

However, seeing the positive effect of this action, members of the group agreed to extend the 9.7 million barrels per day supply cut till July.

After news broke yesterday that the initial agreement would be maintained, the price of the Brent crude futures went up by 75 cents or 1.75 per cent to $43.65 per barrel, while the US West Texas Intermediate (WTI) crude futures rose 69 cents or 1.71 per cent to $40.98 per barrel.

With this decision, OPEC and its allies will restore some oil supplies next month but added that the impact will be barely felt as demand recovers from the coronavirus crisis.

After almost three months of historic output curbs, the 23-nation coalition led by Saudi Arabia and Russia will proceed with its plan to gradually taper the reductions.

The decision was widely expected but still created worries about the demand side of the market after a resurgence of the coronavirus in the US, the world’s largest oil consumer. The new cases have led to closing down of establishments in some cities.

Speaking at the OPEC+ video conference on Wednesday, Saudi Energy Minister and chair of the meeting, Prince Abdulaziz bin Salman said, “As we move to the next phase of the agreement, the extra supply resulting from the scheduled easing of production cuts will be consumed as demand continues on its recovery path.”

“Economies around the world are opening up, although this is a cautious and gradual process. The recovery signs are unmistakable,” he added.

The oil cabal and its allies will withhold 7.7 million barrels a day from the market in August, compared with cuts of 9.7 million currently.

The group’s two largest members, Russia and Saudi Arabia, publicly backed the move, and other ministers participating in the video conference had agreed in principle, according to sources.

Business Post understands that this supply increase will be offset by members that didn’t fulfil their commitments to reduce output in May and June – such as Iraq and Nigeria.

Both countries have said they will make up for those shortcomings with extra reductions in August and September.

Those compensation cuts are a crucial principle and the group must resist the temptation to relax, Prince Abdulaziz said.

On his part, the co-chair of the alliance and Russian Energy Minister, Mr Alexander Novak said the tapering of production cuts is fully in line with the current market trends.

“Almost all of the output hikes will be consumed in domestic markets of the producing countries as the demand is recovering,” he said

The group, however, said it would only consider calling an emergency meeting to reverse the easing of its cuts if severe economic lockdowns return.

Economy

NGX All-Share Index Jumps 0.17%

Published

15 hours ago

18/01/2025

Dipo Olowookere

By Dipo Olowookere

A 0.17 per cent growth was recorded by the Nigerian Exchange (NGX) Limited on Friday, extending the stay of the local bourse in the positive territory.

This uptrend was maintained despite profit-taking in the banking sector, which left its index down by 0.23 per cent at the close of trading activities.

Business Post reports that the insurance industry expanded by 4.04 per cent during the session, the energy counter improved by 1.05 per cent, and the consumer goods space gained 0.58 per cent, while the industrial goods sector closed flat.

Consequently, the All-Share Index (ASI) went up by 170.62 points to 102,353.68 points from 102,183.06 points and the market capitalisation grew by N541 billion to N62.851 trillion from N62.310 trillion.

There were 34 price gainers and 22 price losers yesterday, indicating a positive market breadth index and strong investor sentiment.

The trio of Caverton, Livestock Feeds and Sovereign Trust Insurance appreciated by 10.00 per cent each during the session to quote at N2.20, N5.94, and N1.10, respectively, as Neimeth jumped by 994 per cent to N3.43, and Royal Exchange increased by 9.88 per cent to 89 Kobo.

On its part, Academy Press lost 9.74 per cent to close at N3.15, PZ Cussons declined by 9.09 per cent to N25.00, DAAR Communications weakened by 8.64 per cent to 74 Kobo, Transcorp Power shed 5.91 per cent to settle at N46.95, and Dangote Sugar fell by 4.94 per cent to N38.50.

A total of 327.8 million shares valued at N11.8 billion were traded in 11,905 deals on Friday versus the 472.2 million shares worth N16.7 billion transacted in 12,336 deals on Thursday, representing a decline in the trading volume, value, and number of deals by 30.58 per cent, 29.34 per cent and 3.49 per cent apiece.

Access Holdings recorded the highest sales with 49.1 million stocks sold for N1.2 billion, Fidelity Bank exchanged 20.4 million shares valued at N359.0 million, UBA traded 20.1 million equities worth N681.0 million, Oando transacted 14.8 million shares for N998.1 million, and Universal Insurance traded 13.8 million stocks worth N8.7 million.

Economy

NASD OTC Exchange Gains 0.26%

Published

15 hours ago

18/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange extended its upward movement with a 0.26 per cent gain on Friday, January 17 amid renewed interest in unlisted stocks.

This raised the market capitalisation of the trading platform by N2.79 billion at the close of business to N1.075 trillion from the N1.072 trillion it closed in the preceding session.

In the same vein, the NASD Unlisted Security Index (NSI) went up by 8.08 points at the close of transactions to 3,111.91 points from the 3,103.83 points recorded at the previous session.

Yesterday, the volume of securities traded by investors went down by 606 per cent to 486,215 units from 1.2 million units, the value of shares shrank by 84.7 per cent to N2.8 million from N18.0 million, and the number of deals decreased by 65 per cent to 14 deals from the 33 deals carried out a day earlier.

In the final trading day of the week, there were three price gainers and one price loser, Geo-Fluids Plc, which lost 9 Kobo to finish at N4.70 per unit versus the preceding session’s price of N4.79 per unit.

On the flip side, Okitipupa Plc gained N3.60 to settle at N39.59 per share compared with the previous day’s N35.99 per share, Industrial and General Insurance (IGI) Plc added 3 Kobo to wrap at 36 Kobo per unit compared with the preceding session’s 33 Kobo per share, as FrieslandCampina Wamco Nigeria Plc improved its value by 49 Kobo to N39.65 per unit from N39.16 per unit.

At the close of business, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, trailed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and Afriland Properties Plc with 690,825 sold for N11.1 million.

The most active stock by volume (year-to-date) remained IGI Plc with 23.5 million units worth N5.3 million, followed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and FrieslandCampina Wamco Nigeria Plc with 3.4 million units sold for N134.9 million.

Economy

Naira Rallies by 0.06% to N,1547/$1 at NAFEM

Published

16 hours ago

18/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira extended its appreciation against the US Dollar by 0.06 per cent or N89 Kobo on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 17, trading at N1,547.58/$1 compared with the previous day’s value of N1,548.47/$1.

Market analysts expect that the Naira will appreciate in the first quarter of the year, backed by continued policy support by the Central Bank of Nigeria (CBN).

Vestance Nigeria, an agribusiness advisory firm, projects that the exchange rate will trade between N1,650/$1 and N1,750/$1 this year in its Resilience and Recovery for Agribusiness in 2025 outlook report.

“The Central Bank of Nigeria (CBN) will continue implementing reforms to enhance exchange rate market transparency while maintaining higher interest rates to curb inflationary pressures and attract foreign portfolio management,” it said.

Also, the Nigerian currency improved its value against the Pound Sterling by N20.84 to wrap the session at N1,883.59/£1 versus the preceding day’s N1,904.43/£1 and against the Euro, the Nigerian currency gained N10.45 to settle at N1,590.34/€1, in contrast to Thursday’s closing price of N1,600.79/€1.

In the parallel market, the domestic currency appreciated against the greenback by N5 yesterday to sell for N1,675/$1 compared with the N1,675/$1 it was traded a day earlier.

As for the cryptocurrency market, there was profit-taking amid excitement for a new era of crypto-friendly US government mounts ahead of Donald Trump’s inauguration next week.

Crypto investors expect a change from Mr Trump who promised on the campaign trail to position the US as a leader in the crypto space including creating a national stockpile of Bitcoin, in stark contrast to past years’ regulatory crackdowns and enforcements.

Litecoin (LTC) fell by 9.9 per cent to trade at $124.56, Ripple (XRP) slumped by 6.2 per cent to $3.10, Cardano (ADA) dipped by 4.9 per cent to $1.06, Ethereum (ETH) dropped 3.1 per cent to finish at $3,270.61, Binance Coin (BNB) went down by 2.3 per cent to $698.57 and Dogecoin (DOGE) depreciated by 2.2 per cent to $0.3927.

However, Solana (SOL) rose by 8.8 per cent to end at $235.12, Bitcoin (BTC) expanded by 0.8 per cent to $102,494.03, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.