Oil hits 5-Month Peak, Neutralizes Gains On U.S Crude Inventories Surge

Taiwo Adekeye, FMVA

April 4, 2024

Oil prices settled at their highest levels since October on Wednesday on investor concerns about supply disruptions due to conflict in the Middle East, although a jump in U.S. crude oil inventories capped the gains. Brent futures rose 43 cents, or 0.5%, to settle at $89.35 a barrel, and U.S. West Texas Intermediate futures gained 28 cents, or 0.3%, to $85.43 a barrel.

China: Hong Kong Feb retail sales surged by 1.9%

In February, Hong Kong experienced its 15th consecutive month of growth in retail sales, driven by sustained increases in tourism and consumption. Retail sales for the month reached HK$33.8 billion ($4.32 billion), marking a 1.9% rise compared to the same period last year. This growth surpassed the 0.9% increase observed in January, as well as the 7.8% rise in December and the 15.9% surge in November. Despite this positive trend in sales value, there was a 0.5% increase in retail sales volume in February, a reversal from the 1.2% decline recorded in January. This volume decline in February represents the first decrease since December 2022, when it declined by 0.6%. However, it rebounded with a 4.8% growth in December 2023 and a 12.4% increase in November. Hong Kong’s economy is forecasted to grow between 2.5% and 3.5% this year, following a 3.2% expansion in 2023, as the city continues efforts to recover from the impact of the COVID-19 pandemic amidst ongoing fiscal challenges and economic headwinds.

India: India’s economy, likened to ‘Goldilocks,’ prompts the central bank to maintain current interest rates.

The Reserve Bank of India (RBI) is poised to maintain interest rates unchanged at its upcoming meeting, marking the seventh consecutive meeting without a rate adjustment. The last rate change occurred in February 2023, when the policy rate was increased to 6.5%. With India approaching a general election this month, the economy is outpacing expectations, although there are indications of lower price trends, albeit with lingering concerns about food inflation. India’s economy surged by an impressive 8.4% in the fourth quarter of 2023, surpassing growth rates of major economies. However, in February, retail prices rose faster than anticipated, with a 5.09% increase attributed to elevated food prices, exceeding the RBI’s 4% target. Despite headline inflation persisting above the central bank’s target, core inflation has dipped below the 4% mark.

Kenya:  Central bank maintains lending rate at 13.0%.

On Wednesday, Kenya’s central bank opted to maintain its benchmark lending rate at 13.0%, aiming to facilitate the ongoing decline of inflation to the desired level. The Kenyan shilling has stabilized against the dollar following the successful issuance of $1.5 billion in international markets by the government in February, which was intended to partially repurchase another bond set to mature in June. Inflation, which had persistently hovered at the upper end of the government’s preferred range of 2.5-7.5% for several months, dropped to 5.7% last month. The current monetary policy stance is geared towards ensuring a continued reduction in overall inflation towards the midpoint of the target range of 5.0 percent.

Nigeria: NERC increases electricity tariffs for bigger consumers to N225/KWh

On Wednesday, Nigeria’s electricity regulator sanctioned an adjustment in tariffs for wealthier consumers who utilize more electricity, as part of the government’s efforts to reduce reliance on subsidies and alleviate strain on public finances. These customers represent 15% of the nation’s 12 million electricity consumers. The federal government, acting through the Nigerian Electricity Regulatory Commission (NERC), has greenlit an increase in electricity rates for consumers falling within Band A. Under the approved tariff adjustment, these customers will now be charged N225 per kilowatt hour, up from the current rate of N66. However, the commission has subsequently reevaluated the distribution companies’ application and has determined that any approved rate increase will solely impact the 17% of feeders and fewer than 15% of customers served by the distribution company.