Akintunde Oyedokun
Research Analyst
Oil prices edged up on Thursday as markets reacted to potential U.S. tariffs on Canadian and Mexican crude imports, set to take effect this weekend.
Brent crude settled 0.4% higher at $76.87 per barrel, while U.S. crude rose 0.2% to $72.73. Analysts suggest traders have already priced in the tariff risk.
Meanwhile, U.S. crude stockpiles increased by 3.5 million barrels due to winter storms. On the supply side, new U.S. sanctions are squeezing Russian oil exports, while OPEC+ plans to meet on Feb. 3 to discuss production strategies.
U.S. Growth Slows In Q4 As Investment Drops, But Consumer Spending Surges
The U.S. economy grew at a 2.3% annualized rate in Q4, down from 3.1% in the previous quarter, as a Boeing strike weakened business investment. However, consumer spending surged at its fastest pace in nearly two years, highlighting strong domestic demand. Inventory shortages and trade shifts further contributed to the slowdown.
Despite recession fears, the economy expanded 2.8% in 2024, exceeding the Federal Reserve’s non-inflationary growth target of 1.8%. The Fed kept interest rates steady, reducing its forecast to just two cuts this year due to inflation risks and policy uncertainty. Economists anticipate slower growth in the second half of 2025.
Fed Holds Rates, Cites Inflation Concerns and Economic Stability
The Federal Reserve kept interest rates unchanged, with Chair Jerome Powell indicating that rate cuts will only be considered when inflation and job market data warrant them. While the economy remains stable, potential disruptions from Trump’s policies on trade, immigration, and taxes create uncertainty. Powell emphasized that the Fed’s policy is well-calibrated, noting that while inflation is still above target, it’s expected to decline.
After three rate cuts last year, inflation has stagnated but remains elevated. The central bank maintained its 4.25%-4.50% rate range, awaiting further economic data before making any changes.
Italy’s Economy Flat in Q4, Growth Outlook for 2025 Weakened
Italy’s economy showed no growth in the fourth quarter of 2024, marking a second consecutive quarter of stagnation, despite receiving EU recovery funds. Year-on-year GDP increased by 0.5%, falling short of expectations and reflecting continued weaknesses in domestic demand. Exports provided some positive contribution, but industry growth was offset by declines in services and agriculture.
The outlook for 2025 remains uncertain, as geopolitical tensions and global trade risks loom large. The government’s 1% growth forecast for 2024 is expected to be revised downward, leaving Italy with a challenging economic landscape as it heads into the new year.
Tanzania, Burundi Sign $2.15B Railway Deal With China For Mineral Transport
Tanzania and Burundi have signed a $2.15 billion agreement with two Chinese firms to construct a railway linking the two countries for transporting metals, including nickel, to the port city of Dar es Salaam. The project will be developed by China Railway Engineering Group Ltd and China Railway Engineering Design and Consulting Group. It will be financed by the African Development Bank (AfDB), as confirmed by Tanzania’s finance minister, Mwigulu Nchemba.
The 282-kilometer standard gauge railway is expected to transport three million metric tons of minerals annually. This venture is part of China’s ongoing investment in African infrastructure projects, including railways, power plants, and ports, through its Belt and Road Initiative.
LNG Exports Drop 20% As Pipeline Vandalism Disrupts Nigeria’s Gas Supplies
Nigeria’s LNG exports fell by 20% last week, largely due to repeated pipeline sabotage in the Niger Delta region. The Nigeria LNG Ltd. confirmed that these attacks have interrupted gas supply to its plants, leading to delays in scheduled shipments. With exports potentially delayed by up to 10 days, the ongoing disruptions undermine Nigeria’s efforts to meet the growing demand for LNG, particularly in Europe, where the need has surged following the loss of Russian gas.
Despite significant progress reported by the Nigeria National Petroleum Corporation (NNPCL) in curbing oil theft, the security challenges in the Niger Delta persist. The NNPCL has uncovered hundreds of illegal refineries and pipeline connections this year, but these issues continue to hamper Nigeria’s oil production. Experts caution that unless the security situation improves, President Tinubu’s goal of increasing oil production to 2.06 million barrels per day may remain unachievable.