Oil Settles Lower As Demand Concerns Outweigh Geopolitical Price Support

Taiwo Adekeye, FMVA

February 21, 2024

On Tuesday, the drop in oil prices was driven by heightened worries about a decline in global demand. Despite the ongoing conflict between Israel and Hamas providing some price support, the overall impact of these demand concerns led to a decrease in oil prices. Brent futures declined by 1.5% closing to $82.34 a barrel while the U.S. West Texas Intermediate (WTI) crude for March delivery which expires Tuesday, declined by 1.3% to close at $78.18 a barrel.

Nigeria: FGN secured N1.49 trillion in two FGN bond offers, falling short of the N2.5 trillion target.

The federal government in February secured N1.49 trillion from the two FGN bond offer issued by the Debt Management Office (DM0) below the target of N2.5 trillion. The DMO obtained bids totaling N1.9 trillion, marking a record for the highest received in any FGN securities auction. By the end of the auction, N873.53 billion was assigned to the FGN 2031 bonds, and N621.38 billion was allocated for the 2034 FGN bonds, resulting in a total allotment of N1.495 trillion. The substantial offering was structured in response to the federal financing needs and with the intention of attracting foreign investors.

DR Congo: Democratic Republic of Congo PM Lukonde tenders’ resignation.

Democratic Republic of Congo’s prime minister, Jean-Michel Sama Lukonde, resigned on Tuesday, triggering the dissolution of his government. The prime minister tendered his resignation to President Felix Tshisekedi eight days after the confirmation of his mandate as a national deputy. However, he will be joining the parliament as a member of the assembly. Additionally, the president has asked (Lukonde’s) government to keep on handling current affairs until a new government is formed.

South Africa: South African labor market recovery halts just months before election

South Africa’s unemployment rate surged in Q4’ 2023, opposing a trend where jobs tend to be added around the holiday season as a labor market recovery from the COVID-19 pandemic ground to a halt. The official unemployment rate, increasing from 31.9% in the third quarter to 32.1%, presents a bleak outlook just months ahead of the national and provincial elections in the country. Finally, community and social services, construction, agriculture and trade sectors contributed to the unemployment increase while the drop in employment in the trade sector in Q4’ 2023 was unusual.

Russia: Russia shipped 200,000 tonnes of free grain to six African countries

Moscow had completed its promises of shipping 200,000 metric tonnes of free grain to six African countries, as promised by President Vladimir Putin in July. The Europe most populous country shipped 50,000 tonnes each to Somalia and the Central African Republic and 25,000 tonnes each to Mali, Burkina Faso, Zimbabwe and Eritrea. However, Putin had promised to deliver free grain to the six countries at a summit with African leaders in July, soon after Moscow withdrew from a deal that had allowed Ukraine to ship grain from its Black Sea ports despite the war Russia has been waging.