Economy

Oil Slides on Rising Omicron Cases

Published

3 years ago

14/12/2021

By Adedapo Adesanya

Oil eased on Monday on worries that rising coronavirus cases around the world could reduce crude demand as new doubts emerged about the effectiveness of vaccines against the Omicron variant.

Brent crude dropped 1.0 per cent or 76 cents to settle at $74.39 per barrel while the West Texas Intermediate (WTI) crude moderated by 0.5 per cent or 38 cents to $71.29 per barrel.

The World Health Organisation (WHO) hit the market with a fresh round of scaring news as it said that the Omicron variant, reported in more than 60 countries, poses a very high global risk, with some evidence that it evades vaccine protection.

The global health authority said there were early signs that vaccinated and previously infected people would not build enough antibodies to ward off infection from Omicron, resulting in high transmission rates and severe consequences.

It, however, maintained that it was unclear whether Omicron is inherently more contagious than the globally dominant Delta variant.

On their parts, governments around the world, including most recently the United Kingdom and Norway, were tightening restrictions to stop the spread of the omicron variant.

At least one person has died in the UK after contracting the omicron coronavirus variant, the first publicly confirmed death globally from the swiftly spreading strain.

These developments overshadowed a positive forecast from the Organisation of the Petroleum Exporting Countries (OPEC) which noted that the impact of the Omicron COVID variant on global oil demand will be mild and short-lived, as it left its 2021 and 2022 demand growth forecasts unchanged.

In its closely-watched Monthly Oil Market Report (MOMR), the cartel suggested that recent fears of Omicron slashing oil demand significantly may be unfounded.

“The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges. This is in addition to a steady economic outlook in both the advanced and emerging economies,” OPEC said in its report.

The organisation revised down slightly its demand forecast for this quarter, mostly to account for COVID-19 containment measures in Europe and the potential impact of the new Omicron COVID-19 variant.

However, OPEC kept its full-year demand growth estimate unchanged from last month’s assessment of growth of 5.7 million barrels per day in 2021 compared to 2020.

For 2022, the outlook is also unchanged, with growth still expected at 4.2 million barrels per day compared to this year, as in last month’s outlook.

OPEC and its allies, OPEC+ group remain confident in oil demand, as well as the flexibility to immediately adjust production if needed, when it kept its production plans unchanged earlier this month, planning to add another 400,000 barrels per day to the market in January.

Economy

NASD Index Appreciates 0.69% to 3,095.00 Points

Published

3 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.

During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.

In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.

Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.

Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.

During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.

At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.

Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.

Economy

FX Supply Pressure Weakens Naira to N1,548/$1 at NAFEM

Published

3 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira recorded a 0.38 per cent or N5.86 depreciation on the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 13 to close at N1,548.89/$1, in contrast to the preceding session’s N1,543.03/$1.

The local currency weakened further in the official market yesterday as the deadline to cut off Bureaux De Change (BDC) operators from the Electronic Foreign Exchange Matching System (EFEMS) built to enhance transparency in the FX system looms.

Recall that the Central Bank of Nigeria (CBN) in December opened a 42-day window to allow BDCs to buy FX worth $25,000 per week from the spot market.

However, the domestic currency appreciated against the Pound Sterling in the official market on Monday by N11.87 to trade at N1,877.43/£1 compared with last Friday’s N1,889.29/£1 and against the Euro, it improved its value by N4.94 to close at N1,578.87/€1, in contrast to the previous trading day’s N1,583.81/€1.

A look at the parallel market indicated that the Nigerian Naira slumped against the greenback yesterday by N5 to sell at N1,655/$1 compared with the preceding session’s N1,650/$1.

In the cryptocurrency market, large positive outcomes came even as risk assets weighed the possibility of US Federal Reserve rate cuts in the wake of Friday’s hotter-than-expected US jobs report.

The biggest gainer was recorded by Dogecoin (DOGE) as it rose by 3.9 per cent to sell at $0.3422, Bitcoin (BTC) grew by 0.9 per cent to trade at $94,843.98, Binance Coin (BNB) appreciated by 0.8 per cent to sell for $687.84, and Solana (SOL) recorded a 0.8 per cent growth to quote at $185.24.

Further, Ripple (XRP) increased its value by 0.7 per cent to close at $2.53, and Cardano jumped by 0.3 per cent to settle at $0.9469.

On the flip side, Ethereum (ETH) depreciated by 1.9 per cent to finish at $3,159.52, and Litecoin (LTC) went down by 0.9 per cent to close at $98.68, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Prices up as China, India Seek Alternative Supply After Fresh US Sanctions

Published

3 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

Oil prices rose on Monday as Chinese and Indian buyers sought new suppliers after the administration of President Joe Biden of the United States imposed toughest sanctions yet on Russian energy.

Last Friday, the US Treasury Department imposed sanctions on Gazprom Neft and Surgutneftegas, as well as 183 vessels that traded oil as part of Russia’s so-called “shadow fleet” of tankers. The move is expected to cost Russia billions of Dollars per month.

This pushed the price of Brent higher by $1.25 or 1.6 per cent yesterday to $81.01 per barrel and raised the US West Texas Intermediate (WTI) crude by $2.25 or 2.9 per cent to $78.82 a barrel.

As a result, Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to the severe sanctions on Russian producers and tankers that are designed to curb the revenues of the world’s second-largest oil exporter.

The large sanction gives Ukraine and the US President-elect, Mr Donald Trump, leverage to reach a deal for peace in the almost three years war.

Market analysts note that these sanctions have the potential to take as much as 700,000 barrels per day of supply off the market, which would erase the surplus that we are expecting for this year.

On its part, Goldman Sachs estimated that vessels targeted by the new sanctions transported 1.7 million barrels per day of oil in 2024, or 25 per cent of Russia’s exports. The bank is increasingly expecting its projection for a Brent range of $70-$85 to trade.

The Vladimir Putin-led government said the sanctions risked destabilising global markets, and Russia would seek to counter them.

Many of the tankers named have been used to ship oil to India and China after previous Western sanctions. A price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.

Also, six European Union countries called on the European Commission to lower the price cap put on Russian oil by G7 countries, arguing it would reduce Russia’s revenue to continue the war while not causing a market shock.

However, weaker demand from major oil buyers, China, could have an impact on the tighter supply as data showed that China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic.