Global Market Update: Oil Falls To 6-Month Low On Weak Economic Forecast Amid High U.S. Supply

Taiwo Adekeye, FMVA
December 8, 2023
The biggest oil producer, the United States, is continuing to generate headline output, but the biggest oil importer in the world, China, is curbing its appetite for petroleum. In November, China witnessed a 13.3% decrease in crude oil imports compared to October, having a significant impact on oil prices. For the first time since June, Brent prices started to trade below half-year prices this week, suggesting an oversupplied market. The price of a barrel of Brent oil futures fell 25 cents to $74.05. West Texas Intermediate (WTI) oil futures for the US dropped 4 cents to $69.34. Prices for both benchmarks were at their lowest since late June.
Nigeria: Import duty rises as FG increases exchange rate
The customs duties for imported goods at Nigerian ports have increased due to the Federal Government’s decision to raise the exchange rate for cargo clearance through the CBN. The exchange rate for payment of customs duty was raised from N783/$ to N952/$ on Thursday. This is the fourth time the exchange rate for cargo clearance was raised this year. The currency rate was changed by the CBN in June from N422.30/$1 to N589/$1. It was modified to N770.88/$1 in July and N783.174/$1 in November.
Botswana: Botswana reduces its key rate as inflation is within range.
The southern Africa country had a minor decrease in inflation from 3.2% in September to 3.1% in October, which is still within the 3% to 6% target range set by the Bank of Botswana. The central bank of Botswana cut its policy rate by 25 basis points to 2.40% on Thursday, as Inflation remains within its target range. The Monetary Policy Rate had been at 2.65% since August 2022 based on a 7-day instrument.
South Africa: South African Rand rises amid speculations on Fed rate decrease.
The South African rand appreciated due to growing speculation that the U.S. Federal Reserve may lower interest rates in Q1′ 2024. U.S. Treasury rates have been trading lower due to the pricing in of rate cuts that might occur as early as March, which has improved the outlook on riskier assets like the ZAR. The currency is also supported by lower oil prices. The ZAR gained more than 0.7% in value against the USD, trading at 18.8250/$, while the USD was recently down 0.25% against a basket of other currencies.
Russia: Russia committed to disclose more data on volume of its export and refining.
Russia is the only OPEC+ member that participates in the group’s agreement to reduce supply by contributing to export cutbacks rather than production reduction. After OPEC+ urged Moscow to provide greater openness on the shipments of classified fuel from the several export locations spread around the large nation, Russia has promised to release further information about the scale of its fuel refining and exports. Russia exports over 6-7 million barrels of oil per day, making it the second-largest oil and fuel exporter in the world, after Saudi Arabia.
China: China-Russia trade hits $218 bln in 11months
China and Russia’s commerce hits $218.2 billion between January and November, according to figures from Chinese customs released on Thursday. This represents a year-earlier than expected achievement of the goal established by both nations in 2019. The value of the two-way commerce in the first 11 months of 2023 also exceeded the sum for the entire 2022, assuring that 2023 will be a year of new record highs for bilateral trade. China and Russia had an agreement in 2019 to boost trade from $107 billion in 2018 to $200 billion by 2024.

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