Akintunde Oyedokun
Research Analyst
Oil prices fell to a four-year low on Monday as OPEC+ accelerated supply increases despite shaky global demand. Brent dropped 1.7% to $60.23, and WTI fell 2% to $57.13, their lowest since February 2021.
OPEC+ will boost output by 411,000 bpd in June, bringing the three-month total to 960,000 bpd. Saudi Arabia is reportedly driving the move to pressure non-compliant members and U.S. shale producers, with a full unwinding of cuts possible by October.
U.S. Services Sector Grows, But Tariffs Drive Inflation, Recession Fears
U.S. services sector growth picked up in April, with the ISM PMI rising to 51.6. But inflation pressures intensified as input costs jumped to a two-year high, driven by new tariffs and federal spending cuts. Businesses reported stockpiling ahead of import duties and flagged inconsistent trade policies as a concern.
Despite a rise in new orders and sales, the overall outlook remains uncertain. Weaker consumer spending and higher prices may weigh on future growth. Markets responded with lower stock prices, a softer dollar, and rising Treasury yields.
Canada’s Services Sector Contracts For Fifth Straight Month Amid Economic Uncertainty
Canada’s services sector shrank for the fifth consecutive month in April, with the S&P Global PMI at 41.5, indicating a continued contraction. The decline was attributed to political and trade policy uncertainty, especially following the Canadian election. While the Liberal Party retained power, the lack of an outright majority hindered trade negotiations with the U.S. Activity, new business, and employment all decreased, and firms lowered output prices for the first time since 2021 to manage high costs. The Composite PMI also dropped to 41.7, marking the steepest contraction since June 2020.
Egypt’s Foreign Assets Rise By $4.9bn Following IMF Approval
Egypt’s net foreign assets surged by $4.9 billion in March, reaching $15.08 billion, following the IMF’s approval of the fourth review of its $8 billion economic reform program. The approval triggered a $1.2 billion disbursement and a $1.3 billion arrangement under the IMF’s resilience facility. Foreign investors also increased their purchases of Egyptian pound treasury bills. Since September 2021, Egypt has relied on foreign assets to support its currency, with net assets turning positive in May 2024 after a period of decline.
President Tinubu To Meet Power GenCos Leadership Over N4tr Debt
President Bola Tinubu will meet Nigeria’s power generation companies (GenCos) to discuss the over N4 trillion debt owed by the Federal Government. Minister of Power, Adebayo Adelabu, confirmed that the government is committed to paying a significant portion immediately, with the remainder settled through promissory notes in six months. Adelabu also highlighted the need for reforms and cost-reflective tariffs to address systemic issues in the power sector.
