Global Market Update: Oil Investors To Usher In 2024 Amidst Supply, Demand Worries

Taiwo Adekeye, FMVA

December 15, 2023

Since the beginning of the Ukrainian conflict, disruptions in Russian supplies caused prices to soar above $100 per barrel, which is why benchmark Brent has averaged about $80 a barrel this year. Worries about excess supply, sluggish economic growth, and simmering tension in the Middle East that could lead to price volatility will be present among oil investors as 2024 approaches. Supply in 2024 is expected to grow by between 1.2 million and 1.9 million bpd, driven by non-OPEC+ producers.

Ghana: Inflation rate drops to 26.4% in November

Ghana’s consumer inflation rate declined from 35.6% in October to 26.4% in November amounting to a decline of 8.8% when compared to the previous month. The sharp decline in the inflation rate is as a result of the drop in prices of food items such as vegetables, fish and cereals. The YoY food inflation stood at 32.2% while the non-food inflation rate was 21.7% for November. Ghana is currently experiencing its worst economic crisis in a generation as it works with multilateral lenders and creditors to restructure its debt, despite this sharp decline in inflation figures.

South Africa: South Africa producer inflation declines to 4.6% YoY in November.

South Africa’s producer inflation slowed to 4.6% year on year in November from 5.8% in October. On a month-on-month basis, the producer price index was at -0.6% in November from 1.0% the previous month. The ZAR gained against the softer USD on Thursday after data showed producer inflation fell more than expected in November. The rand was trading 18.5100 against the dollar, over 0.8% stronger than its previous close.

Uganda: Ugandan shilling gains strength as importer dollar demand declines.

The Ugandan shilling gained ground on Thursday, lifted by falling demand for dollars from importers in manufacturing and telecoms sectors. commercial banks quoted the shilling at 3,780 per dollar, stronger than Wednesday’s closing rate of 3,785.

Russia: Inflation could near 8% before end of Q4′.

President Vladimir Putin said on Thursday that annual inflation in Russia might hit 8% this year, this came the day before the central bank is widely anticipated to raise interest rates once more in an effort to control skyrocketing prices. However, Bank of Russia to raise its key rate by 100 basis points to 16% on Dec. 15, with inflationary pressure exacerbated by labor shortages and lending growth in addition to soaring government spending and a weak rouble. The Nation’s GDP dropped to 2.1% in 2022 as sanctions over Russia’s invasion of Ukraine pounded the economy.

India: India lowers logistics costs to below 9% of GDP with increase in state spending

India’s logistics costs have dropped below 9% of gross domestic product due to rising state spending on roads, ports and digitization. The logistics costs were down in the range of 7.8% to 8.9% of GDP in 2021/22, compared to 8.8% to 10% of GDP in 2012/13. In the current fiscal year, which ends in March, the Modi administration is spending over 10 trillion rupees ($120 billion) on infrastructure, which is approximately one-third more than it did in the previous fiscal year.

China: CB’ will increase its infusion of liquidity while maintaining the current key rate.

China’s central bank is expected to boost liquidity injections while leaving the key interest rate constant when it rolls over maturing medium-term policy loans on Friday. The PBOC injected a net 600 billion yuan of cash via MLF loans into the banking system in November, the biggest monthly increase since December 2016. However, the interest rate on the medium term lending (MLF) loans currently stands at 2.5%.

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