Again, Oil Climbs Over $1pb As OPEC+ Considers Extending Production Cuts

Taiwo Adekeye, FMVA

February 28, 2024

Oil prices was up by more than $1 a barrel on Tuesday as OPEC+ is considering extending voluntary oil output cuts into the second quarter to give additional support. The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, made an agreement in November to voluntary cuts totaling about 2.2 million barrels per day (bpd) for Q1 2024. Brent crude futures rose by $1.12 closing at $83.65 a barrel, while U.S. West Texas Intermediate crude futures (WTI) were up by $1.29 to close at $78.87.

Nigeria: Nigeria hikes rate by 400bps to tame soaring inflation

Nigeria’s central bank delivered its largest rate hike in absolute terms in over 16 years on Tuesday to curtail rising inflation, amid nationwide trade union protests over price rises that have left people struggling to meet their basic needs. Central Bank of Nigeria Governor Olayemi Cardoso raised the benchmark rate by 400bps hitting 22.75% aimed at reducing inflationary pressure in the most populous country in Africa. Inflation has reached almost 30%, its highest in almost 30years, driven by a depreciation in the naira currency, the removal of a fuel subsidy, fiscal deficits and conflict in food-producing parts of Africa’s biggest economy.

Russia: Russia bans gasoline exports for 6 months

Russia, the world’s second largest oil exporter on Tuesday ordered a six-month ban on gasoline exports from March 1 to maintain prices amid surging demand from consumers and farmers. However, this measure was taken in order to offset excessive demand for petroleum products, and to help stabilize prices in the domestic market. Exports of oil, oil products and gas are by far Russia’s biggest export, a major source of foreign currency revenue for Russia’s $1.9 trillion economy. Russia is already voluntarily cutting its oil and fuel exports by 500,000 barrels per day in the first quarter as part of OPEC+ efforts to support prices.

Mexico: Mexico prepared to retaliate if US imposes steel tariffs

Mexico is ready to impose tariffs on steel if its biggest trading partner, the United States, imposes such measures first, Mexican Economy Minister Raquel Buenrostro stated on Tuesday. The U.S. calls to impose tariffs on steel imports from Mexico have been politically motivated and are detrimental to trades. The United States lifted tariffs on Mexican steel in 2019, warning they could be reinstated to protect the U.S. industry if shipments from Mexico expands beyond its imposed limit. Mexico’s share in the U.S. steel market stood at around 2.5% last year, while the U.S. presence in the Mexican market was about 14%.

India: India’s Apr-Jan steel imports hits six-year high as China shipments surge

India’s steel imports hit a six-year high in the first 10 months of the fiscal year to March, driven by Chinese shipments, and India was a net importer of finished steel. India, the world’s second-biggest crude steel producer has a strong demand for steel, as the country remained a bright spot globally with robust demand from its construction and automotive sectors. Steel consumption in India jumped 14.5% to a six-year high of 112.5 million metric tons during the period, reflecting buoyant demand for the alloy in one of the world’s fastest-growing economies. Conclusively, India imported 6.7 million metric tons of finished steel between April and January, up 35% from a year earlier.