Oil Gains Marginally As Demand Concerns Mitigate Impact Of Middle East Conflict

Taiwo Adekeye, FMVA

February 20, 2024

Brent crude oil prices was a bit high on Monday as continuing supply concerns from tensions in the Middle East were offset by signs of declining demand. The markets’ saw smaller volumes than usual as a result of the Presidents’ Day holiday in the U.S. Brent futures was up by 9 cents to settle at $83.56 a barrel while U.S. West Texas Intermediate (WTI) crude for March delivery, which has no settlement yesterday but expires on today, rose 30 cents to $79.49 a barrel.

Nigeria: Unemployment rate hits 5%

Nigeria’s unemployment rate rises to 5.0% in Q3’ 2023 from 4.2 % in the previous quarter. The labor force participation rate, which measures the share of a country’s working-age (15 and above) population that is in the labor force declined to 79.5 % in Q3 compared to 80.4 %in Q2. The unemployment rate in Africa’s biggest economy, with more than 200 million people, fell from 5.3 % in Q4 2022 to 4.1 % in Q1 2023 while the unemployment rate increased significantly in Q3 2023 at 5.0 per cent, an 0.8 % increase from Q2 2023

Niger: Niger defaults $22mln, debt totals $520 Million

Niger last week missed a debt payment of 13.4 billion CFA francs ($22 million), making its total default to hit $519 million since a July coup and its suspension from regional financial markets. Niger has been suspended from the regional financial market, and the regional central bank by the Economic Community of West African States (ECOWAS) and UEMOA after a military coup that sent President Mohamed Bazoum packing.

Kenya: Kenya’s double digit debt signals challenging times

The east Africa nation has opted for a calculated risk by accepting a new international bond with a yield of over 10%, aiming to avert a potential default later in the year. However, such moves have historically resulted in adverse outcomes. Double-digit borrowing cost amid high interest rate serves as an indication that a country is facing significant challenges. The east Africa giant in slumber is facing a looming risk of being unable to meet a substantial $2 billion bond payment scheduled for June.

China: China maintains key policy rate, influenced by US Fed

China’s central bank left a key policy rate unchanged, striking a delicate balancing act to boost the economy at a time when signs of persistent deflationary pressure call for additional stimulus measures. The People’s Bank of China (PBOC) is maintaining the rate on 500 billion yuan ($69.51 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged from 2.50%. Benchmark loan prime rate (LPR) could fall in coming days, with five-year tenor more likely to be reduced aiming to stabilize confidence, promote investment and consumption, and also help support the stable and healthy developments of the real estate market.