Oil Settles Lower On Weaker US Gasoline Demand, Gaza Ceasefire Hopes

Taiwo Adekeye, FMVA

March 22, 2024

Oil prices settled marginally on Thursday, pressured by weaker U.S. gasoline demand data and reports of a United Nations draft resolution calling for a ceasefire in Gaza. However, Crude inventories in the United States, the world’s biggest oil consumer, unexpectedly declined last week. Brent crude futures for May settled was down by 0.2% to $85.78 a barrel, while U.S. West Texas Intermediate futures for May settled was also down by 0.3%, to $81.07 a barrel after a fall of about 1.8% in the previous session.

India: India to start optional same-day settlement for 25 stocks

India’s markets regulator will start an optional same-day settlement for 25 stocks with a limited number of brokers on March 28. the Securities and Exchange Board of India (SEBI) said the optional T+0 will work alongside the existing T+1 settlement. In T+1, trades are settled within 24 hours of execution. However, T+0 settlement will be only for trades executed between 09:15 a.m. to 1:30 p.m. IST.  Brokers adhering to exchanges’ processes and risk management norms will be eligible for T+0, and bourses will publish the list of participating brokers. To avoid market distortions due to price discrepancies for shares trading in both settlement cycles, trading in T+0 will be subject to a price band of 100 basis points above or below prices in T+1.

Japan:  Export surges as demand improves in key markets

In February, Japan experienced a third consecutive month of export growth, driven by increased demand from the U.S., China, and the European Union. This offers a glimmer of hope for policymakers aiming to stimulate growth following a lackluster performance last year. Exports rose 7.8% in February from the same month a year ago, higher than the 5.3% gain expected by economists. The Bank of Japan made a historic departure from its unconventional policies by discontinuing eight years of negative interest rates and other remnants, marking a significant shift away from decades of extensive monetary stimulus. Imports rose 0.5% year-on-year in February versus the median estimate for a 2.2% increase. While trade balance came to a deficit of 379.4 billion yen ($2.52 billion), versus a median estimate for a deficit of 810.2 billion yen.

South Africa: Consumer inflation rose to 5.6% year on year

South Africa’s consumer inflation rose for the second consecutive month, edging closer to the upper target set by the central bank, signaling a longer wait for a rate cut. Headline consumer inflation rose to 5.6% year on year from 5.3% in January. Key contributors to the annual inflation rate included food, housing, transport and miscellaneous goods and services, which include medical insurance. While core inflation which excludes food and fuel prices, accelerated in February to 5.0% in annual terms from 4.6% in January.

Kenya: Kenya increases its economic growth prediction for this year to 6.3%.

Kenya’s economy is forecast to grow 6.3% this year, up from an estimated 6.1% in 2023. The ministry disclosed in February that it expected growth for this year and 2023 would be 5.5%, up from 4.8% in 2022. The revised projection for the current year, along with last year’s estimation, were outlined in the government’s economic blueprint spanning until the conclusion of 2027. However, the growth would be driven by expansion in agriculture, small and medium businesses, as contained in the economic plan.