Global Economic Update: Oil Prices Slip By 1% After Surprise US Storage Build-Up

Taiwo  Adekeye, FMVA

January 11, 2024

Oil prices dropped by almost a dollar per barrel on Wednesday, following an unexpected increase in U.S. crude stocks that sparked concerns about demand in the main oil market. U.S. West Texas Intermediate crude futures fell by 1.2%, to close at $71.37 a barrel, while Global benchmark Brent crude oil futures declined by 1% to close at $76.80 a barrel.

Nigeria: CBN sacks boards of three lenders for regulatory failures

CBN has sacked the boards and management of three lenders for non-compliance with banking regulations and corporate governance failures. The banks’ infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others. The affected lenders are privately held Union Bank, Keystone Bank and Polaris Bank

Argentina: Monthly inflation seen at highest since 1990 in December

Monthly inflation rate likely soared to 28% in December, which would be the highest since early 1990, driven by a sharp devaluation of the peso currency last month by the new government. The devaluation unleashed a wave of pent-up inflation, with food, apparel and transport costs adjusting sharply in the wake of the devaluation, which was aimed at narrowing a huge gap between the official exchange rate and widely used parallel rates. Net foreign currency reserves are deep in negative territory, two-fifths of the population is in poverty, huge debt payments are looming, and the government is racing to revamp a $44 billion loan program with the International Monetary Fund.

Russia: Russian Oil exports via its network declined by 6.5% in 2023

Russian crude exports via its pipelines were down 6.5% last year, while total oil deliveries through its network in 2023 had remained flat from 2022. oil supplies via its pipelines to China in 2023 amounted to 40 million metric tons, unchanged from the previous year. Russian pipeline oil supplies to Europe are excluded from an EU embargo, but the route crosses Belarus and Ukraine and has been under constant risk of disruption since Russia sent thousands of troops into Ukraine in 2022

Brazil: Inflation seen higher in December, but annual rate on target

Monthly inflation probably rose in December on higher costs of farm products and airfares, but the annual rate remained close to the central bank’s upper target. consumer prices in Latin America’s No.1 economy behaved better in 2023 due to outstanding agricultural conditions, strict monetary policy, and some fiscal restraint efforts from the government. Brazil’s IPCA inflation index is forecast to have increased 0.48% in December, compared to a 0.28% rise in November. However, the YOY rate is seen at 4.54%, below 4.68% in November and the upper limit of the central bank’s official target range of 1.75% to 4.75% for the first time since 2020.


India: The rupee continues upward trend for a six day due to dollar inflows

The Indian rupee recovered its early losses to close higher for the sixth straight session due to dollar inflows from overseas. Following a close of 83.1150 in the previous session, the rupee ended the day at 83.0350 against the US dollar, its highest closing level since December 15. The rupee has remained the best-performing Asian currency as a result of  dollar inflows.