Economy

OPEC’s Indecision on Output Cuts Affects Oil

Published

5 years ago

14/07/2020

By Adedapo Adesanya

Oil prices fell more than 2 per cent on Monday as Saudi Arabia is reportedly leading a coalition that supports easing production cuts in August on expected increased demand.

The international crude benchmark, Brent crude, dropped 98 cents or 2.27 per cent to sell at $42.26 per barrel, while the US West Texas Intermediate (WTI) crude lost 95 cents or 2.43 per cent to settle at $39.60 per barrel.

For the past three months, the reduction of oil production by 9.7 million barrels daily from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) have brought prices back from the brink.

Now, the market is reacting as OPEC+ members are expected to ease their production cuts to 7.7 million barrels per day after a recovery in global oil demand.

The group will have to tread carefully to avoid triggering a new price collapse when it begins to reverse those reductions.

Oil prices had taken a fall early in the year after a decline in the demand for the product from China, which shut parts of its economy due to the spreading coronavirus.

A price war between Saudi Arabia and Russia also made the situation worse, and in March, oil took a sharp leg down as the U.S. and Europe took steps to lock down economic activity. Things worsened in April until the 23-producer group came together to reduce production, brining stability to the market in May.

The Joint Ministerial Monitoring Committee, which reviews OPEC+ production, will meet on Wednesday and will consider whether the group should keep 9.7 million barrels a day off the market or roll that back by about 2 million barrels a day, a move supported by OPEC’s largest producer, Saudi Arabia.

Also affecting prices on Monday was the rise in COVID-19 cases in the US. The virus has seen a resurgence in Asia, which could knock crude demand and oil prices back down again.

The World Health Organization (WHO) reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000.

In the United States alone, infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state. This poses a bigger threat especially now that producers are looking to taper cuts, raising worries about oversupply.

The International Energy Agency (IEA) said last week that the worst effects of the coronavirus on oil demand have passed, but the impact will linger.

It said oil demand would be down by 5.1 million barrels a day in the second half of 2020. While that’s less than half of the 10.8 million drops in demand in the first half, the rise in oil prices could entice more producers to add oil to the market.

Economy

NASD Bourse Declines for Third Straight Session by 0.10%

Published

33 minutes ago

10/04/2025

Adedapo Adesanya

By Adedapo Adesanya

For the third consecutive trading session, the NASD Over-the-Counter (OTC) Securities Exchange ended in red territory, losing 0.10 per cent on Wednesday, April 9.

The market capitalisation lost N1.88 billion to close at N1.892 trillion compared with the preceding day’s N1.894 trillion and the NASD Unlisted Security Index (NSI) went down by 3.24 to settle at 3,277.39 points, in contrast to Tuesday’s 3,280.63 points.

The platform recorded two price losers yesterday, with Afriland Properties Plc losing 62 Kobo to close at N17.80 per share compared with the previous day’s N18.42 per share and Geo-Fluids Plc shedding 24 Kobo to end at N2.22 per unit versus Tuesday’s N2.46 per unit.

The volume of securities bought and sold by the market participants was down by 28.4 per cent to 185,449 units from the 259,092 units transacted in the previous trading day, the value of shares recorded slid by 74.8 per cent to N2.6 million from N10.5 million and the number of deals fell by 35.3 per cent to 11 deals from 17 deals previously recorded.

The most active stock by volume on a year-to-date basis remained Impresit Bakolori Plc with a turnover of 533.9 million units worth N520.9 million, followed by Industrial and General Insurance (IGI) Plc with 71.2 million units valued at N24.2 million, and Geo Fluids Plc with 44.5 million units sold for N90.0 million.

Also, the most active stock by value on a year-to-date basis was still FrieslandCampina Wamco Nigeria Plc with the sale of 14.4 million units valued at N557.7 million, trailed by Impresit Bakolori Plc with 533.9 million units worth N520.9 million, and Afriland Properties Plc with 17.8 million units valued at N365.0 million.

Economy

Naira Stable Against Dollar at Official Market Amid Pause in Tariffs

Published

2 hours ago

10/04/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira maintained stability against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, April 9 at N1,612.97/$1 as traders weighed developments in the domestic scene and the global market.

This indicates that the local currency is facing ease in recent pressure after export tariffs hit the country and fanned concerns about the country’s FX reserves, which have been dropping in recent weeks.

President Donald Trump announced that he was instituting a 90-day pause on most new tariffs (excluding China). This may also also cover the recent 14 per cent placed on Nigeria.

In addition, the Central Bank of Nigeria (CBN), while announcing that the country recorded a positive Balance of Payment (BOP) reiterated that it will continue to stabilise the Naira through its policy coordination and harmonisation.

However, the Nigerian currency depreciated against the Pound Sterling by N24.80 to wrap the session at N2,085.01/£1 compared with the preceding session’s N2,060.21/£1 and lost N43.08 against the Euro to settle at N1,805.64/€1 versus N1,762.56/€1.

It also weakened against the Dollar in the parallel market yesterday by N5 to trade at N1,620/$1, in contrast to the N1,615/$1 it was exchanged in the previous trading day.

In the cryptocurrency market, there were positive outcomes across benchmarked tokens after the U-turn on tariffs led to relief.

President Trump paused higher tariffs on all countries, except China, where he increased the levy to 125 per cent, amid mounting concerns from global leaders and recession fears.

Based on this, countries that were hit with the higher, reciprocal duties that went into effect Wednesday will now be taxed at the earlier 10 per cent baseline rate applied to other nations.

Ripple (XRP) went up by 10.1 per cent to $1.99, Ethereum (ETH) appreciated by 9.9 per cent to sell at $1,610.16, Solana (SOL) recorded a 9.5 per cent rise to close at $116.08, and Cardano (ADA) also jumped 9.5 per cent to trade at $0.6231.

In addition, Dogecoin (DOGE) rose by 8.4 per cent to $0.1571, Bitcoin (BTC) improved by 6.3 per cent to $81,899.98, Litecoin (LTC) expanded by 6.2 per cent to $74.39, and Binance Coin (BNB) gained 5.1 per cent to settle at $578.86, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.

Economy

NGX Investors Lose N119bn Despite Bullish Sentiment

Published

2 hours ago

10/04/2025

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited reserved the previous day’s gains to close lower by 0.18 per cent on Wednesday due to renewed profit-taking.

This occurred despite the market breadth index closing positive as there were 33 price gainers and 23 price losers, indicating a bullish sentiment.

Haldane McCall topped the losers’ log after it shed 10.00 per cent to settle at N5.22, Learn Africa also depreciated by 10.00 per cent to N2.97, Ecobank lost 9.90 per cent to sell for N26.85, PZ Cussons went down by 9.88 per cent to N30.10, and Unilever Nigeria slumped by 9.75 per cent to N34.70.

On the flip side, Livestock Feeds finished on top of the gainers’ chart after it chalked up 10.00 per cent to quote at N8.03, VFD Group appreciated by 10.00 per cent to N72.60, NGX Group increased by 9.86 per cent to N35.65, Coronation Insurance improved by 9.60 per cent to N1.94, and Union Dicon gained 9.48 per cent to end at N6.35.

At midweek, the All-Share Index (ASI) decreased by 189.73 points to 104,187.00 points from 104,376.73 points and the market capitalisation moderated by N119 billion to N65.470 trillion from N65.589 trillion.

Investors bought and sold 376.6 million stocks worth N11.9 billion in 11,576 deals versus the 460.6 million stocks valued at N10.1 billion traded in 14,528 deals a day earlier, implying a growth in the value of transactions by 17.82 per cent and a drop in the trading volume and number of deals by 18.24 per cent and 20.32 per cent, respectively.

The busiest equity for the session was GTCO with 62.9 million units sold for N4.1 billion, Access Holdings traded 51.4 million units valued at N1.1 billion, Zenith Bank exchanged 32.3 million units worth N1.5 billion, UBA transacted 22.6 million units valued at N775.2 million, and Mutual Benefits traded 18.2 million units worth N16.6 million.

Business Post reports that the banking space went down by 1.60 per cent, the consumer goods index depreciated by 0.23 per cent, and the industrial goods sector crumbled by 0.04 per cent, while the energy counter appreciated by 0.47 per cent, while the commodity industry closed flat.