Oil Prices Rise As Global Demand Surge Amid Drop In US Stock

Taiwo  Adekeye, FMVA

January 19, 2024

Oil prices settled higher on Thursday after the International Energy Agency (IEA) joined OPEC in predicting strong growth in global oil demand and as cold winter weather reduced U.S. crude output while the government reported a big weekly draw in crude inventories. Brent crude futures was up by $1.22 to close at $79.10 a barrel, while U.S. West Texas Intermediate crude futures also settled up by $1.52 closing at $74.08.

Nigeria: Nigeria set to authorize Shell’s oil asset sale

Shell on Tuesday stated its exit from Nigeria’s onshore and shallow water operations after deciding to sell the business to a consortium of five mostly local companies, opting to concentrate its future investments in the less challenging deep offshore fields. Nigeria, Africa’s top oil producer, has suffered declining output in recent years as a result of theft and sabotage, majorly at onshore fields, as well as low investment in the sector. However, Nigeria backs its decision to sell its onshore oil and gas assets, and will provide the necessary regulatory approval.

Egypt:  Diversions from the Suez Canal mounts pressure on Egypt’s struggling economy.

The Egyptian economy which is already in decline faces revenue drops after sea attacks by Yemen Houthis that redirected shipping activities from the Suez Canal and has negatively impacted the already deteriorating economy signaling a quick reform. canal revenue plunged by 40% in the first 11 days of January. From July 1 of the previous year to June 30, the canal contributed a record-breaking $8.76 billion to Egypt, with an additional $2.40 billion in Q3.

South Africa: The South African rand strengthens amid increase in mining output.

South Africa’s Rand strengthened on Thursday following monthly mining figures showed an increase in production. The Rand traded at 18.9475 against the dollar, 0.6% higher than its previous close. The country’s total mining output was up by 6.8% YoY in November after a revised increase of 3.6% in the previous month. However, there was decline in the production of diamonds, manganese ore and gold. South Africa’s benchmark 2030 government bond was firmer, with the yield down 3 basis points to 9.795%.

India:  India to permit edible oil imports with reduced duties until March 2025

India to extend edible oil imports at a lower duty by another year ending March 2025 as the world’s No 1 vegetable oil importer moves to contain local prices. The great move was to keep prices in check ahead of its general election.  The Asian Nation annual retail inflation surged greatly in four months in December, driven by an increase in prices of some food items. In order to curtail prices, the government banned wheat exports in 2022 and restricted overseas shipments of non-basmati white rice last year, new Delhi also halted mills from exporting sugar this year.