Economy
Worries for Nigerians as Brent Nears $84 Per Barrel
By Adedapo Adesanya
The price of Brent crude rose by 82 cents or 0.99 per cent on Wednesday to $83.74 per barrel after the market calmed on data which showed that crude inventories in the United States fell less than expected and the Federal Reserve raised interest rates by a quarter of a percentage point.
Also, the US West Texas Intermediate (WTI) crude increased by 85 cents or 1.1 per cent during the midweek session to quote at $79.66 per barrel.
The rise in the price of Brent, which Nigeria prices its headline crude against, raises worry for Nigerians as it will likely indicate another increase in the pump price of Premium Motor Spirit (PMS), otherwise known as petrol, after President Bola Tinubu removed the subsidy in May.
Since then, prices have been left to the mercy of market forces, as the federal government planned to save the trillions paid on making fuel cheaper for consumers to boost the struggling economy.
The market had initially fallen when the US central bank raised interest rates by 25 basis points on Wednesday.
The US Federal Reserve Chairman, Mr Jerome Powell, said the economy still needed to slow, indicating that will be further hikes to meet its 2 per cent inflation target.
The hike, the Fed’s 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25 per cent -5.50 per cent range, a level which has not been consistently exceeded since 2001.
Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.
The Energy Information Administration reported an estimated draw of 600,000 barrels in U.S. oil inventories for the week to July 21.
This compared with a modest inventory decline of 700,000 barrels for the previous week that kept inventories slightly above the five-year seasonal average.
Earlier this week, the American Petroleum Institute (API) reported an estimated build in crude oil inventories.
Oil prices, however, remained relatively strong, stimulated by tighter supply and measures taken by Beijing to strengthen economic growth in China.
After months of traders watching economic indicators and bracing up for a global recession, now the concern is trickling in about the security of sufficient oil supply, analysts note.
This is buoyed by signs of tighter supplies, largely linked to output cuts by Saudi Arabia and Russia, as well as Chinese authorities’ pledges to shore up the world’s second-biggest economy.
However, Reuters reported that although Saudi Arabia will roll over its August output cuts to September, Russia is expected to significantly increase oil loadings in September, bringing to an end to recent export cuts.
By Adedapo Adesanya
A 0.91 per cent growth was recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, May 22, after the share prices of four securities ended in green.
According to data, FrieslandCampina Wamco Plc went up by N15.61 to N179.67 per share from N164.06 per share, Newrest Asl Plc grew by N6.11 to N67.26 per unit from N61.15 per unit, Food Concepts Plc appreciated by 17 Kobo to N2.75 per share from N2.58 per share, and Nitrox Industrial Gases Plc added 6 Kobo to sell at N25.50 per unit compared with the previous day’s N25.44 per unit.
At the close of business, the market capitalisation chalked up N23.22 billion to settle at N2.561 trillion versus Thursday’s N2.538 trillion, and the NASD Unlisted Security Index (NSI) increased by 38.81 points to 4,281.28 points from 4,242.47 points.
During the session, the price of Central Securities and Clearing System (CSCS) Plc was down by N3.13 to N71.07 per share from N74.20 per share.
The activity chart showed that the volume of securities transacted by the market participants decreased yesterday by 81.6 per cent to 590,339 units from the 3.2 million units recorded on Thursday, as the number of deals shrank by 28.6 per cent to 30 deals from the 42 deals recorded a day earlier, while the value of securities increased by 0.5 per cent to N95.3 million from the preceding session’s N94.8 million.
Great Nigeria Insurance (GNI) Plc closed the day as the most active stock by value on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 61.2 million units traded for N4.1 billion.
The most active stock by volume on a year-to-date basis was GNI Plc, with the sale of 3.4 billion units for N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units exchanged for N415.7 million.
By Dipo Olowookere
The Nigerian Exchange witnessed a decline in transactions on Friday despite closing higher by 0.22 per cent on the back of sustained bargain-hunting.
During the last trading session of the week, investors transacted 711.9 million equities valued at N29.1 billion in 62,386 deals compared with the 1.1 billion equities worth N31.0 billion traded in 62,448 deals in the previous day, indicating a decline in the trading volume, value, and number of deals by 35.28 per cent, 6.13 per cent, and 0.10 per cent, respectively.
Fidelity Bank closed the day as the most active stock with the sale of 198.1 million units for N4.6 billion, Access Holdings traded 69.7 million units worth N1.8 billion, Mutual Benefits exchanged 42.7 million units valued at N197.4 million, Japaul transacted 33.9 million units worth N134.4 million, and Zenith Bank sold 24.4 million units valued at N3.2 billion.
Yesterday, the industrial goods index rose by 0.53 per cent, the consumer goods sector jumped 0.28 per cent, the banking industry improved by 0.25 per cent, and the energy counter soared by 0.18 per cent, while the insurance space shed 0.18 per cent.
At the close of business, the All-Share Index (ASI) gained 536.98 points to finish at 249,712.37 points compared with the previous day’s 249,175.39 points, and the market capitalisation grew by N344 billion to N160.077 trillion from N159.733 trillion.
Aluminium Extrusion and DAAR Communications expanded by 10.00 per cent each to sell for N9.90 and N2.09, respectively, RT Briscoe surged by 9.93 per cent to N14.06, Learn Africa increased by 9.79 per cent to N12.90, and Red Star Express advanced by 9.56 per cent to N34.95.
On the flip side, Trans-Nationwide Express depreciated by 9.92 per cent to N5.72, Livestock Feeds dipped by 9.64 per cent to N8.90, The Initiates crashed by 8.65 per cent to N33.80, Ellah Lakes drowned by 8.64 per cent to N10.05, and Neimeth lost 6.36 per cent to trade at N10.30.
By Adedapo Adesanya
The Naira weakened against the United States Dollar by N3.15 or 0.23 per cent to N1,375.46/$1 from N1,372.31/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, May 22.
It was also a similar situation for the domestic currency against the Pound Sterling in the official market yesterday, as it lost N9.46 to sell for N1,849.72/£1 compared with the preceding session’s N1,840.26/£1, and against the Euro, it depreciated by N6.26 to close at N1,597.04/€1, in contrast to Thursday’s exchange rate of N1,590.78/€1.
At the GTBank FX desk, the Nigerian Naira tumbled against the Dollar during the session by N2 to trade at N1,381/$1 versus the previous day’s N1,379/$1, and at the parallel market, it remained unchanged at N1,390/$1.
Analysts at Cowry Asset Management Limited, in their weekly financial outlook, have projected the Naira will remain under soft pressure in near term due to continuous FX demand.
“Looking ahead, the Naira may remain under mild pressure in the near term due to persistent FX demand, though rising external reserves could help cushion volatility,” they noted.
Meanwhile, the Central Bank of Nigeria (CBN) this week reiterated that it would continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.
This comes as the FX market has changed significantly under the ongoing reforms introduced by the apex bank, with increased market liquidity reducing the need for heavy intervention by the CBN. Its intervention currently accounts for only about 1.2 to 1.3 per cent of total market turnover in 2025, a development he said reflects the growing strength of the market.
Turnover has risen sharply from about $100 million in 2023 to roughly $550 million presently, with transactions occasionally climbing to as high as $1 billion in a single day.
A look at the cryptocurrency market showed that it was down on Friday as Mr Kevin Warsh was sworn in by President Donald Trump as the chairman of the US Federal Reserve, replacing Mr Jerome Powell, who will continue as a governor in the US central bank.
The appointment was made in the hope that he would lead the central bank to cut interest rates, but the Iran war has sent oil prices soaring and re-ignited what had been cooling inflation.
Ethereum (ETH) depreciated by 5.5 per cent to $2,010.90, Dogecoin (DOGE) lost 5.2 per cent to trade at $0.1001, Cardano (ADA) fell by 5.0 per cent to $0.2389, Solana (SOL) slipped by 4.9 per cent to $82.69, and Bitcoin (BTC) slid by 3.3 per cent to $74,950.02.
Further, Ripple (XRP) went down by 2.9 per cent to $1.32, Binance Coin (BNB) declined by 2.6 per cent to $641.61, and TRON (TRX) shrank by 1.2 per cent to $0.3606, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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