Global Market Update: Oil Prices Decline As Angola Announces OPEC Exit

Taiwo  Adekeye, FMVA

December 22, 2023

Oil prices settled lower on Thursday after Angola exit the Organization of the Petroleum Exporting Countries (OPEC), raising questions about the producer group’s efforts to support prices by limiting global supplies. Angolan oil minister Diamantino Azevedo said the country’s membership in OPEC was not serving its interests. Brent crude futures settled down 31 cents at $79.39 a barrel. U.S. West Texas Intermediate crude futures fell 33 cents to $73.89 a barrel.

Egypt: central bank maintains interest rates as growth drops

Egypt’s central bank kept its overnight interest rates unchanged, GDP growth had slowed to 2.9% in the second quarter of 2023 and headline inflation had decelerated in October and November. The central bank’s Monetary Policy Committee (MPC) left the deposit rate at 19.25% and the lending rate at 20.25%. Headline inflation slowed to 34.6% in November from a record 38.0% in September.

Angola: Angola leaves OPEC

Angola declared on Thursday that it would quit OPEC, dealing a blow to the Saudi-led consortium of oil producers, which has been trying in recent months to garner support for additional production cuts aimed at maintaining oil prices. According to Diamantino Azevedo, Angola’s Minister of Oil, the Organization of the Petroleum Exporting Countries was no longer in the nation’s best interests. It follows the exit of Qatar and Ecuador, two other medium-sized producers from OPEC over the past ten years.

Tanzania World bank grants Tanzania loans worth $1.14billion

The World Bank has approved two separate loans worth about $1.14 billion combined to Tanzania to support its private sector, develop its commercial capital and fight effects of climate change. The first tranche of financing worth $750 million called Development Policy Financing is meant to finance reforms such as making business licensing faster and also broaden access to cheap credit. The second lot of $385 million will be financing infrastructure and building institutions that will help the nation’s commercial capital Dar es Salaam to cope with the effects of climate change

India: RBI spot intervention keeps rupee at low volatility

The Indian central bank’s spot purchase and sale of dollars in October was one-sixth of the total forex trading volume, the spot intervention is to broadly keep the rupee in a narrow range and implied volatility low. The Reserve Bank of India (RBI) purchased $36.7 billion and sold $37 billion in the spot market in October. The rupee was held in a narrow range of 83.04 to 83.25 in October, and it was the same in November and December as well, leading to volatility expectations to drop to the lowest since 2008.

Turkey: Turkey raises rates by 250 basis points.

Turkey’s central bank lifted its key interest rate by 250 basis points to 42.5% on Thursday as expected as it faces down years of soaring inflation, but promised to end the aggressive tightening cycle as soon as possible. The central bank has lifted its one-week repo rate by 3,400 basis points since June, the central bank expects inflation to rise from near 62% last month to 70-75% in May, before dipping to about 36% by the end of next year as tightening cools prices.

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