Oil Prices Surge As Revised IEA Outlook Portrays Tighter Market

Taiwo Adekeye, FMVA

March 15, 2024

Oil prices was up on Thursday to settle at four-month highs as the International Energy Agency forecasted a tighter market in 2024 and raised its view on oil demand growth this year. The energy regulator forecast demand will rise by 1.3 million barrels per day in 2024, up 110,000 bpd from last month, but still lower than growth of 2.3 million bpd last year. Brent crude oil futures for May climbed by 1.7%, to settle at $85.42 a barrel, the highest close since Nov. 6 while U.S. West Texas Intermediate (WTI) crude for April surge by 1.9%, to end at $81.26, also its highest since early November.

India:  India’s February wholesale prices surge by 0.20% on year

India’s wholesale price index in February rose at a slower pace than in the previous month, mainly due a sharper fall in manufactured products and power prices. wholesale prices rose 0.20% year-on-year, compared with a 0.27% gain in January.  Manufactured product prices fell by 1.27% against a 1.13% fall in the previous month, while fuel and power prices fell 1.59% from a year earlier, compared with a 0.51% drop in January. Food prices rose 4.09% year-on-year compared with an increase of 3.79% in January, while prices of primary articles were up 4.49% versus a rise of 3.84%.

China:   Central bank maintains key policy rate

China’s central bank maintain its key policy rate while withdrawing cash from a medium-term policy loan operation, authorities continued to prioritize currency stability amid uncertainty over the timing of expected Federal Reserve interest rate cuts. The People’s Bank of China (PBOC) kept the rate on 387 billion yuan ($53.80 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation. Additionally, with 481-billion-yuan worth of MLF loans set to expire this month, the operation resulted in a net 94-billion-yuan fund withdrawal from the banking system. It also marked the first cash withdrawal through the liquidity instrument since November 2022.

South Africa: South African manufacturing output surges by 2.6% y/y in January

South Africa’s manufacturing output rose 2.6% year-on-year in January, after rising by a revised 1.3% in December while Factory production was up 0.8% month-on-month in January, after falling by a revised 1.3% in December. However, the rand traded at 18.7875 against the dolla , almost 1.2% weaker than its previous close while the  benchmark 2030 government bond fell, with the yield up 3 basis points to 10.240%.

 Nigeria: Nigeria secures $1.3 bln funding for rail

Nigeria has secured $1.3 billion in funding to complete a railway project connecting Kano, the largest city in the north, to Maradi in neighboring Niger. This project will build on existing economic and social ties to boost trade and cultural cooperation between the two countries. Funding will come from a consortium led by the China Civil Engineering Construction Company (CCECC), which will contribute 85% of the total while the remaining 15% will be covered by the Nigerian government alongside institutions like the Africa Export-Import Bank and African Development Bank