Oil Climbs Slmost 1% As Traders Review Deepening Geopolitical Tensions

Taiwo Adekeye, FMVA

February 6, 2024

Oil prices rose about a dollar a barrel on Monday due to tensions in the Middle East and Russia’s ongoing invasion of Ukraine could limit global supplies. However, two Ukrainian drones struck the largest oil refinery in the south of Russia on Saturday. Brent crude futures was up by 66 cents closing at $77.99 a barrel and U.S. West Texas Intermediate crude futures settled at $72.78 a barrel, up by 50 cents. This is the first time Both contracts gained in four sessions.

Malawi:  central bank raises interest rate by 200 basis points

Malawi’s central bank raised its benchmark interest rate by 200 basis points to 26.0% due to high inflationary pressure hitting the southern African economy. The Nations Monetary Policy Committee observed that inflationary pressures have intensified, such that inflation is projected to persist before it starts to decline. Inflation in the tobacco exporting nation reached 34.5% in December.

Morocco: Unemployment rate hits 13% in 2023

Unemployment rate in Morocco rose to 13% in 2023, up from 11.8% in 2022. The unemployment rate was fostered by the farming sector as it continues to cut jobs due to drought. 1.58 million unemployed people were recorded in Morocco as at 2023, with the agricultural sector losing 202,000 jobs after six consecutive dry years in a row. The Agricultural exporting nation has unemployment recorded among young people at 35.8%, unemployed graduates stood at 19.7% and among women 18.3%

Botswana: Botswana projects economic rebound, budget targeted towards infrastructure

Botswana forecasts a recovery in it economic growth this year and plans to increase spending on infrastructure development in a stimulus budget.  The southern African country’s economy was affected by a drop in demand for diamonds last year. The gems generate about 30% of its total revenue and 70% of its foreign exchange earnings. growth was estimated at 3.2% in 2023, lower than a previous forecast of 3.8%, picking up to 4.2% this year and 5.4% in 2025 premised on the world economy recovering. Conclusively, the government plans to mobilize additional resources by issuing instruments such as inflation-linked bonds and green bonds.

Russia: Russian oil facilities hit by drone attacks, fires

Russia energy infrastructure has been hit by drone attacks and fires in the past month, adding more pressure to uncertainty in global oil and gas markets already rocked by the conflict in the Middle East. In their nearly two-year-long conflict, Russia and Ukraine have launched strikes on each other’s energy infrastructure, aiming at disrupting supply lines, logistics, and demoralizing each other in their ongoing fight to gain an advantage. However, two Ukrainian attack drones struck the largest oil refinery in the south of Russia on Saturday, disrupting Russia’s exports of naphtha, a petrochemical feedstock.

China: China aims at stabilizing stocks by focusing on regulating margin loans and short selling

China’s securities regulator set to tighten scrutiny of margin financing, malicious short selling and long to ward off risks involving pledged shares. The regulatory body’s commitment to stabilizing the market comes as worries mount that declining share prices might prompt additional selling, leading to a potentially detrimental situation. However, the Chinese CSRC vowed zero tolerance against ill-intended short sellers, anyone who flaunts the law will lose their assets and rot in jail.