On Thursday, OPEC+ oil producers reached an agreement to implement voluntary output reductions amounting to approximately 2.2 million barrels per day (bpd) in the early months of next year. This initiative is spearheaded by Saudi Arabia, which is extending its existing voluntary production cut. Benchmark global oil prices experienced a roughly 2% decline, influenced partially by the voluntary nature of the announced reductions and investor expectations leading up to the meeting, where there was speculation that additional supply cuts could be more extensive. On Thursday, Saudi Arabia, Russia, and other OPEC+ members, collectively responsible for over 40% of the world’s oil production, convened in an online meeting to deliberate on supply policy. During the online meeting, the group engaged in discussions regarding the 2024 output, taking into consideration forecasts indicating a potential market surplus. Additionally, the impending conclusion of a 1 million barrel per day (bpd) cut by Saudi Arabia next month was a focal point of the deliberations. OPEC+’s output, which is now at 43 million barrels per day, has already been reduced by around 5 million barrels per day in an effort to stabilize the market and sustain prices. Brazil, one of the top 10 producers, was also extended an invitation by OPEC+ to join the organization. According to the ministry of energy, the nation intended to join in January.
Nigeria: The intraday high reached N1,137 as NGN marginally weakened at the official market.
On Thursday, November 30, 2023, the NGN finished flat at the parallel market after slightly weakening against the USD at the official market, the intraday high was N1137/$1. This indicates a reversal from the positive movement observed the previous day, during which the NGN had strengthened to N831.47 against the USD at the official market. The local currency depreciated by 0.10%, concluding at N832.32 to a dollar at the close of business on Thursday. This information is based on data from the NAFEM, where forex is officially in relation to the N831.47 it closed on Wednesday, this indicates a 0.85 kobo loss, or a 0.10% fall in the local currency. Nevertheless, at the parallel forex market where foreign exchange is unofficially traded, the naira maintained a steady position. The exchange rate was quoted at N1160/$1, the same as the previous day’s closing rate. Peer-to-peer traders, on the other hand, quoted around N1168.55/$1. The Central Bank of Nigeria (CBN) has attempted to control the value of the naira by implementing a number of policies, but these have not been sufficient to stop the naira’s decline in relation to the USD
Kenya: Kenyan inflation drops to 6.8% YoY in November
According to data released by the statistics office on Thursday, Kenya’s inflation dropped slightly from 6.9% to 6.8%YoY in November. Inflation on a monthly basis was 0.2%, down from 1.0% in October, according to a statement from the Kenya National Bureau of Statistics (KNBS). Food, housing and utilities, and transportation all have a significant impact on the East African country’s annual inflation.
Zimbabwe: Zimbabwe anticipates economic downturn, due to drought
Finance Minister Mthuli Ncube announced on Thursday that Zimbabwe’s economic growth is projected to decrease to 3.5% in 2024, down from 5.5% this year. The primary factor contributing to this decline is the expected drought caused by El Nino. El Nino, a natural climate phenomenon characterized by unusually warm surface waters in the central and eastern Pacific, is anticipated to impact crop yields during the 2023/24 farming season. This phenomenon leads to changes in global weather patterns with potential consequences for agricultural productivity. He predicted that Zimbabwe’s annual budget deficit would be 1.2% of GDP at the end of the year, and that annual inflation would drop from 20% in 2023 to 10%–20% in 2024.
India: Russia’s oil exports to India increased in November.
In November, India witnessed a resurgence in its imports of Russian oil, marked by the return to operation of several plants following planned maintenance. Additionally, heightened fuel consumption during the Diwali festive season contributed to this rebound. As the world’s third-largest importer and consumer of oil, India has increased its acquisitions of Russian oil, particularly those offered at a discounted rate. This trend emerged as some Western countries refrained from importing Russian oil in the aftermath of Russia’s invasion of Ukraine last year. In November, India observed a notable increase in its monthly intake of Russian oil, with a 9% rise in crude oil imports and a 5% increase in overall oil imports compared to the previous month. The figures reached 1.73mmbpd and 1.68mmbpd, respectively. The import volume remains below the May record of about 2mmbpd despite a substantial narrowing of discounts. It is anticipated that December imports of oil into India could reach approximately 1.7-1.8mmbpd or potentially even higher. This projection aligns with the seasonal peak in diesel consumption in India during this period.
Germany: German unemployment surges in November amid economic recession
According to the Federal Labor Office, the number of unemployed persons rose to 2.702 million in seasonally adjusted figures, a rise of 22,000. The seasonally adjusted rate of unemployment increased from 5.8% in October to 5.9% while 90,000 fewer jobs were available in November than there were a year earlier. According to the Ifo employment barometer, which was released on Tuesday, employers in Germany were less eager to hire new employees in November. The job market is experiencing minimal growth, with employment showing only slight increases, while the overall demand for labor continues to decline.
China: China is investigating anti-subsidy levies on wine imports from Australia
In a widely anticipated action that is a part of an effort to strengthen ties between the two nations, China said on Thursday that it will examine the necessity of anti-dumping and anti-subsidy taxes on Australian wine imports. Australia and China announced that a World Trade Organization issue pertaining to wine had been resolved amicably, and that the anti-dumping duties, which are scheduled to expire in 2026, will be reconsidered. China’s 2021 imposition of a 218% tariff on the majority of Australian wine caused the trade, which was formerly estimated to be worth up to $1.2 billion yearly, to collapse. The government has actively engaged with China to obtain a similar mechanism to resolve the wine issue, after the speedy elimination of levies on Australian barley. Australian Prime Minister Anthony Albanese has attempted to restore relations with China, a significant trading partner, which had declined over the previous several years as a result of disagreements over the COVID-19 pandemic, espionage, and the Chinese telecom company Huawei.
Taiwo Adekeye, FMVA