Economy
Oil Rebounds Amid Omicron Threats
By Adedapo Adesanya
Oil prices returned to the bullish territory on Monday after a heavy price crash last Friday amid fears over the threat to demand triggered by the new Omicron COVID-19 variant.
The international benchmark, Brent crude futures, gained $1.02 or 1.39 per cent to trade at $74.46 per barrel, while the United States’ benchmark, West Texas Intermediate (WTI) crude, gained 89 cents or 1.27 per cent to sell at $70.84 per barrel.
Last week, the market panicked over Omicron, the new heavily mutated coronavirus variant detected in South Africa, dropping more than 10 per cent over fears sparked by what the global health authority – the World Health Organisation (WHO) classified as a “variant of concern.”
However, Monday breathed a fresh air of relief as traders, investors, and speculators awaited scientific evidence of whether Omicron should be as feared as the oil market appeared to fear at the preceding session.
WHO declared on Sunday that it was not clear yet if Omicron was more transmissible or if infection with Omicron causes more severe disease compared to infections with other variants, including Delta.
The market also found support when the Organisation of the Petroleum Exporting Countries and allies (OPEC+) said there was no panic about the new variant.
Russia and Saudi Arabia, who lead the coalition, signalled there was no need for OPEC+ to race to adjust oil output policy this week.
Russian Deputy Prime Minister Alexander Novak was quoted as saying that he sees no need for urgent action on the oil market over Omicron, downplaying the possibility of changes to an OPEC+ oil supply deal this week.
“There is no need for hasty decisions,” he was quoted as saying, adding “We will additionally discuss with the OPEC+ countries the market situation and if any measures are warranted,” Mr Novak said.
On his part, the Saudi energy minister Prince Abdulaziz bin Salman al-Saud said he was not worried about the Omicron, but declined to comment on OPEC+ plans.
OPEC+ will hold online meetings this week to decide on oil production policy.
The group has been reducing its curbs on output by 400,000 barrels per day of oil per month as it winds down record cuts from last year when it cut production by as much as 10 million bpd to address lower demand caused by lockdowns.
OPEC+ has some 3.8 million barrels per day of cuts still in place and some analysts have suggested the group could pause its output increases.
President Joe Biden urged Americans not to panic about the new COVID-19 variant and said the United States was working with pharmaceutical companies to make contingency plans if new vaccines were needed.
Meanwhile, the Biden administration’s release of Strategic Petroleum Reserves (SPR) has proven to have little impact on the underlying price of oil, following the initial price reaction in oil last week after the government flooded the market with 50 million barrels.
On the back of this, investment bank, JPMorgan thinks Brent will hit $120 per barrel in 2022, and could even overshoot to $150 per barrel in 2023, representing a potential upside of as much as 100 per cent from current levels.
By Dipo Olowookere
The portfolios of investors at the Nigerian Exchange (NGX) Limited increased by 0.34 per cent on Monday on the back of buying interest in consumer goods stocks and others.
Business Post observed bargain-hunting activities across the key sectors of the bourse, though the industrial goods index came under profit-taking, causing it to close lower by 0.57 per cent.
However, this did not affect the general outcome of Customs like it did last Friday.
The consumer goods industry went up by 1.31 per cent, the commodity space rose by 0.84 per cent, the energy counter appreciated by 0.69 per cent, the insurance sector grew by 0.52 per cent, and the banking index improved by 0.04 per cent.
As a result, the All-Share Index (ASI) was up by 363.13 points to 106,116.18 points from 105,753.05 points and the market capitalisation increased by N229 billion to N66.694 trillion from N66.465 trillion.
Investor sentiment was bullish yesterday as the bourse ended with 47 price gainers and 16 price losers, indicating a positive market breadth index.
International Breweries soared by 10.00 per cent to close at N8.47, Legend Internet appreciated by 9.97 per cent to N7.50, Cadbury Nigeria advanced by 9.96 pr cent to N29.25, Fidson grew by 9.95 per cent to N20.45, and Eterna chalked up 9.90 per cent to sell for N43.85.
Conversely, Livestock Feeds lost 10.00 per cent to settle at N8.55, Aradel declined y 9.86 per cent to N448.00, Tripple Gee fell by 9.60 per cent to N1.79, John Holt depreciated by 7.94 per cent to N5.80, and Linkage Assurance slumped by 6.15 per cent to N1.22.
During the session, the market participants traded 500.6 million stocks valued at N12.1 billion in 17,637 deals versus the 428.1 million stocks worth N20.2 billion in 14,284 deals, representing a shortfall in the trading value by 40.10 per cent, and a surge in the trading volume and number of deals by 16.94 per cent and 23.47 per cent, respectively.
Access Holdings was the most active equity for the day with a turnover of 60.9 million units valued at N1.2 billion, Fidelity Bank traded 56.1 million units worth N1.1 billion, UBA exchanged 34.5 million units for N1.2 billion, GTCO transacted 33.5 million units valued at N2.2 billion, and Nigerian Breweries sold 28.3 million units worth N1.2 billion.
By Adedapo Adesanya
The price of the Brent crude oil grade declined by $1.01, or 1.5 per cent on Monday to $65.86 per barrel as economic worries from the US-China trade war pressured demand.
Also, the US West Texas Intermediate (WTI) crude was sold at $62.05 a barrel after it went down by 97 cents or 1.5 per cent amid conflicting signals from US President Donald Trump and the Chinese government over what progress was being made to de-escalate a trade war that could weaken global growth.
According to market analysts, the US-China trade war is dominating investor sentiment in moving oil prices, and has overshadowed other developments, including nuclear talks between the US and Iran and possible friction within the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
On Monday, China lashed out at the US’ negotiating tactics, with Zhao Chenxin, deputy director of the National Development and Reform Commission, saying: “They make up bargaining chips out of thin air, bully and go back on their words.”
The Chinese official was responding to President Trump’s statement earlier in the day that the US would not lower tariffs on China unless it offered up “something substantial”.
This came as US Treasury Secretary Scott Bessent on Sunday did not back President Trump’s assertion that negotiations with China were underway.
Amid this, crude oil inventories in China rose to the highest in almost three years in March, suggesting demand growth was lagging behind refinery processing rates, which hit a one-year high last month as Chinese oil processors took advantage of cheap Iranian and Russian crude.
It was reported that 1.74 million barrels daily went into storage last month in China, citing official data from China, making this the highest rate of storage inflows since June 2023.
Some OPEC+ members are expected to suggest that the group accelerate oil output hikes for a second consecutive month when they meet on May 5.
Earlier this month, there was an unexpected decision by OPEC+ to increase output by 411,000 barrels per day of oil in May, which was three times more than the group originally planned.
By Adedapo Adesanya
The Nigerian Export Promotion Council (NEPC) has announced a 24.75 per cent increase in the value of the country’s non-oil exports, reaching a total of $1.791 billion in the first quarter of 2025.
It stated that the amount surpassed the $1.436 billion generated in the first quarter of 2024.
The Executive Director of the council, Mrs Nonye Ayeni, disclosed the figures while addressing the journalists in Abuja on Monday.
She said the significant growth reflects the resilience and diversification of Nigeria’s export sector beyond crude oil, a shift aimed at reducing the country’s reliance on oil revenue.
According to her, the surge in non-oil exports was driven by increased economic activity in the Agriculture, Manufacturing, and Solid Minerals sectors.
On the US 14 per cent trade tariff, the council says it was positive for the country, adding that it was an opportunity to focus on value addition and increased competitiveness in the global market.
Recall that Nigeria has reiterated plans to boost its non-oil revenues with the Minister of Industry, Trade and Investment, Mrs Jumoke Oduwole, saying the country was stepping up its diversification efforts.
Earlier this month, the Trade Minister said the nation would tackle this challenge with pragmatism, aiming to boost non-oil exports and strengthen economic resilience under President Bola Tinubu’s Renewed Hope Agenda.
Mrs Oduwole had said the US remains a key partner, with bilateral trade reaching N31.1 trillion from 2015 to 2024.
The measures taken by the US presents destabilising challenges to price competitiveness and market access, especially in emerging and value-added sectors vital to our diversification agenda,” the minister explained.
“Government is implementing a range of interventions in policy, financing, infrastructure, and diplomacy to help Nigerian businesses remain competitive amidst regional and global tariff hikes,” Mrs Oduwole said as she outlined Nigeria’s response.
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