Economy
OPEC Revises Oil Demand Growth to 95.89mb/d in 2021
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has revised down its global oil demand growth forecast for 2021 as a result of uncertainty surrounding the COVID-19 pandemic despite the roll-out of vaccines in several countries.
The oil cartel in its latest Monthly Oil Market Report (MOMR) forecast that demand will total 95.89 million barrels per day next year in contrast to its previous forecast of 96.26 million barrels per day.
The downward revision reflects the uncertainty surrounding the impact of COVID-19 on transportation fuels in the Organisation for Economic Co-operation and Development (OECD) economies in the first half of next year.
OPEC estimates their recovery to be capped at 2019 levels and forecasts for a mild winter in the northern hemisphere are pressuring the outlook for middle distillates demand.
Economic growth next year and the related impact on oil demand recovery depends on uncertainties surrounding the pandemic, policies of the incoming US administrations, Brexit and trade negotiations, the cartel said.
Recent news regarding vaccination programmes in most major economies provides upside to next year’s GDP growth forecast of 4.4 per cent.
The UK became the first country to start rolling out the COVID-19 vaccine that US firm Pfizer has developed with Germany’s Biontech earlier this month.
The organisation assumes vaccines will be gradually available globally by the second half of 2021. It said, “Earlier availability would allow a faster-than-anticipated move towards normalisation,” the report said.
Lower transportation fuel demand in the US and OECD Europe led to a downward revision in OPEC’s demand forecast for 2020, which is now pegged at 89.99 million barrels per day, 9.77 million barrels per day lower than 2019. In November, the OPEC report predicted a 9.75 million barrels per day drop in this year’s consumption.
On the supply side, non-OPEC liquids have been revised lower for this year and for 2021. Non-OPEC supply is now expected to average 62.67 million barrels per day this year, down by 2.5 million barrels per day from 2019.
Last month’s report estimated a 2.43 million barrels per day drop to 62.73 million barrels per day. This change reflects lower-than-expected output in the fourth quarter of 2020, mainly in the US, partially offset by revisions to output in Russia and Canada.
Non-OPEC supply is forecast to rebound by 850,000 b/d to average 63.52 million barrels per day next year, a slower pace of growth than the 950,000 barrels per day increase predicted in last month’s MOMR.
“This is mainly due to downward revisions to Russia, following the new decision taken at the recent ministerial meeting of the OPEC and Non-OPEC countries participating in the declaration of co-operation,” the report said.
The trimmed Non-OPEC supply forecast for this year has resulted in an upward revision to the call on OPEC members’ own crude, which is now estimated at 22.2 million barrels per day in 2020, down by 7.1 million barrels per day from 2019. But the forecast call on OPEC crude for next year has been revised down by almost 200,000 barrels per day from last month’s report, to 27.17 million barrels per day.
OPEC crude production averaged 25.11 million barrels per day in November, up by 707,000 barrels per day from October.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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