Oil Price Rebounds 1%, Buoyed By US Crude Draw, Inflation Data

Taiwo Adekeye, FMVA
Research Analyst
Oil prices increased by nearly 1% on Wednesday from a two-month low in the previous session. This rise occurred as the market weighed positive U.S. economic indicators and crude storage data against the International Energy Agency’s (IEA) prediction of diminished global oil demand growth. Brent futures rose 37 cents,  settling at $82.75 a barrel, while U.S. West Texas Intermediate crude (WTI) gained 61 cents, to hit $78.63. The Brent premium over WTI has narrowed to its lowest level since March 28. A smaller premium reduces the profitability for energy companies shipping vessels to the U.S. to collect crude cargoes for export.
China’s Central bank maintains key policy rate 
The central bank of China maintained the key policy rate during the renewal of maturing medium-term lending facility (MLF) loans on Wednesday, as anticipated by the market players. The apex bank is keeping the rate on 125 billion yuan ($17.28 billion) in one-year MLF loans to some financial institutions unchanged at 2.50% from the previous operation. However, the steady MLF rate in veils the central bank’s determination in keeping the Yuan stable. Additionally, the Chinese yuan has depreciated approximately 1.9% against a strengthening U.S. dollar this year, influenced by its comparatively lower yields compared to other global economies.
Argentina lowers interest rate, inflation approaches 300%
Argentina’s central bank has reduced the benchmark interest rate following the fourth consecutive month of slowing inflation, with the annual inflation rate nearing 300%.The central bank announced in a statement that it had reduced the overnight rate to 40% from the previous 50%. This marks the fifth significant cut since the outspoken economist Milei assumed office in December.Inflation in the 12 months through April hits 289.4%, marginally higher than the annualized rate a month earlier.
Euro zone economy grew by 0.3% in Q1 2024
The euro zone economy grew by 0.3% in the first quarter of the year,  an indication that a slow recovery has begun after six consecutive quarters of stagnant or negative growth.The economy contracted by 0.1% in both the third and fourth quarters, fulfilling the traditional definition of a recession with two consecutive quarters of negative growth.Meanwhile, employment increased by 0.3% in the first quarter, supporting anecdotal evidence that the labor market continued to tighten as firms retained workers in anticipation of a growth rebound.Additionally, in the major euro zone countries, Spain led with 0.7% growth in the first quarter, while Germany, France, and Italy recorded growth rates at or just below the euro zone average.
Headline Inflation surges to 33.69% in April 2024
Nigeria’s headline consumer inflation accelerated to 33.69%, up from 33.20% recorded in march 2024, making a new 28-year high. In April 2024, the food inflation rate surges to 40.53% on a year-on-year basis, up from the 24.61% recorded in April 2023. while Core inflation, which omits the prices of volatile food products and energy, hit 26.84% in April 2024 year-on-year, up from the 19.96% recorded in April 2023. Additionally, the central bank took an Hawkish stance twice this year in a bid to curtail inflation.