Economy

Oil Rises on Partial Lifting of Russia Fuel Export Ban

Published

1 year ago

07/10/2023

By Adedapo Adesanya

Oil rose on Friday as another partial lifting of Russia’s fuel export ban compounded demand fears due to macroeconomic headwinds.

On Friday, Brent futures grew by 51 cents to trade at $84.58 per barrel and the US West Texas Intermediate (WTI) crude futures expanded by 48 cents to $82.79 per barrel.

For the week, Brent posted a decline of about 11 per cent and WTI recorded an over 8 per cent drop. This was caused by worries that persistently high interest rates will slow global growth and hammer fuel demand, even if supplies are depressed by Saudi Arabia and Russia, who said they will continue supply cuts to year-end.

Russia announced it had lifted its ban on diesel exports for supplies delivered to ports by pipeline, though the restrictions for petrol exports are still in place.

Diesel is Russia’s biggest oil product export, at about 35 million tonnes last year, of which almost three-quarters were shipped via pipelines. Russia also exported 4.8 million tonnes of petrol in 2022, according to Reuters.

The government, however, said companies still must sell at least 50 per cent of their diesel production to the domestic market.

Support also came as job growth in the US rose by 336,000 in September according to Labor Department statistics.

This is mixed for oil prices as it points to a robust US economy which could buoy sentiment for near-term oil demand.

However, analysts said the statistics resulted in a stronger US Dollar and increased bets on another interest rate hike in 2023.

The US Federal Reserve started raising interest rates in 2022 to cool demand and there are suggestions that monetary policy could remain tight for some time.

A strong US Dollar is typically negative for oil demand, making the commodity relatively more expensive for holders of other currencies. It continued to remain near 11-month highs.

Data from China also lent support as mid-autumn and National Day holiday travel rose 71.3 per cent on the year and 4.1 per cent compared with 2019 to 826 million trips.

In an indication of future US supply, oil rigs fell five to 497 this week, their lowest number since February 2022, according to energy services firm, Baker Hughes.

A ministerial panel of the Organisation of the Petroleum Exporting Countries and allies led by Russia (OPEC+) during the week made no changes to the group’s oil output policy.

Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day until the end of 2023, while Russia would keep a 300,000 barrels per day voluntary export curb until the end of December.

Economy

UBN Property Triggers 0.22% Loss at NASD OTC Exchange

Published

2 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.

It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.

However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.

The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.

At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.

Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.

Economy

Naira Weakens to N1,550/$1 at Official Market, Gains N5 at Black Market

Published

2 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.

Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.

Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.

According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.

Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.

However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.

As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.

Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.

Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.

Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.

Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4 per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Prices Fall as Trump Announces Changes in US Energy Policies

Published

3 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

Oil prices settled lower on Monday after Mr Donald Trump was sworn in for a second time as President of the United States.

On assumption of office, Mr Trump declared a national energy emergency immediately, promising to replenish strategic reserves and export American energy worldwide.

Consequently, Brent crude futures went down by 64 cents or 0.8 per cent to settle at $80.15 per barrel and the US West Texas Intermediate crude futures depreciated by $1.30 or 1.7 per cent to trade at $76.58 per barrel.

Mr Trump and his allies have signalled they would use the authority to rapidly approve new oil, gas, and electricity projects that typically take years to permit, and during his speech said he plans to unleash new oil and gas development on federal lands while reversing the Biden-Harris administration’s de-growth climate regulations.

Market analysts noted that while many of the executive actions will simply kick off a lengthy regulatory process, they extend by a large degree to the US energy industry, from oil fields to car dealerships.

These also underscore Mr Trump’s determination to reorient federal government policy behind oil and gas production, a sharp pivot from Biden’s efforts to curb fossil fuels.

He also said in his inaugural speech that he would impose tariffs and tax countries and promised an overhaul of the trade system.

Last week, prices rose for a fourth-consecutive weekly gain after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers. This led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply.

Meanwhile, dealers of Russian and Iranian oil sought tankers not under sanctions for oil shipment.

While the new sanctions could cut supply from Russia by nearly 1 million barrels per day, market analysts noted that recent price gains could be short-lived depending on Trump’s actions as the new American president promised to help end the Russia-Ukraine war quickly.

Russian President Vladimir Putin congratulated Mr Trump on taking office hours, saying he was open to dialogue with the new US administration on Ukraine and nuclear arms.

Pressure was reduced based on easing tension in the Middle East after Hamas and Israel exchanged hostages and prisoners on Sunday which marked the first day of a ceasefire after 15 months of war.