Oil Steadying Amidst Lack Hamas, Israeli of Ceasefire

Taiwo Adekeye, FMVA
Research Analyst 
Oil futures closed with minimal change on Monday, with negotiators still unable to reach a ceasefire agreement between Hamas and Israel. Both crude oil benchmarks settled 0.5%, higher with Brent crude futures at $83.33 a barrel and U.S. West Texas Intermediate crude futures (WTI) at $78.48 a barrel. The previous week saw the most significant weekly decline in three months for both contracts, with Brent dropping over 7% and WTI decreasing by 6.8%. This decline came as investors assessed the impact of weak U.S. jobs data and speculated about the potential timing of a Federal Reserve interest rate reduction.
German PMI ticks up in April 
Business activity in Germany’s services sector ticks up at the beginning of Q2, as a result of growth in new orders. The Purchasing Managers’ Index (PMI) surged to 53.2 in April from 50.1 recorded in March, moving further above the 50.0 mark that separates growth from contraction. The reading was the highest since for the past 11 months, and the  German service sector, which was still struggling at the beginning of the year, is now rebounding rapidly. The composite PMI index, which comprises services and manufacturing, rose  to 50.6 in April from 47.7 in March, moving above the 50.0 threshold for the first time in ten months. Additionally, the uptick was driven by the services sector, with manufacturing still in deep decline.
India’s PMI marginally down 
The growth in India’s leading services sector slowed marginally but stayed strong due to solid domestic and international demand, boosting business confidence to its highest level in three months. The Purchasing Managers computed  by S&P Global, fell to 60.8 in April from 61.2 recorded  in March, confounding an initial  estimate for a rise to 61.7. Despite the decline in the reading, the figure still marked one of the fastest growth rates in just under 14 years. However, activity in the services sector has been above the 50-mark separating growth from contraction since August 2021. India’s service activity rose at a lower pace in April, backed by a further rise in new orders, with notable strength in domestic demand. Regarding overall activity, combined output in both the manufacturing and service sectors saw a notable increase in April, albeit with a slightly reduced pace, suggesting ongoing strength in these areas.
China’s services activity declined in April 
Services activity expansion in China eases slightly due to increasing costs, but the growth in new orders ticked up, and business sentiment improved significantly, enhancing prospects for a continued economic recovery. The Caixin/S&P Global services purchasing managers’ index (PMI) eased to 52.5 from a 52.7 recorded in March, maintaining expansionary territory for the 16th straight month. Despite growing faster than anticipated in the Q1, the world’s second-largest economy still grapples with numerous challenges, such as an extended property downturn and low domestic demand. Additionally, The S&P’s composite PMI, which tracks both the services and manufacturing sectors, rose to 52.8 last month from 52.7 in March, the highest recorded since  May in 2023.
Nigeria reduces electricity export to boost local supply 
Nigeria’s electricity regulator (NERC)has instructed the grid operator to cut back supplies to customers overseas to boost domestic supply. The method of managing supply has led to significant difficulties for Nigerians as supply under bilateral contracts, including exports to international customers, is prioritized over supply to domestic customers. The regulator has placed a cap of 6% on the total available grid generation to international customers for the next six months, effective from May 1. Power companies in Nigeria have agreements with neighboring African nations to supply energy, providing them with foreign currency to supplement revenue from below-market tariffs. Nonetheless, these companies have not consistently settled their bills promptly.Conclusively, The electricity supply from the national grid had remained below 3,000 megawatts for several weeks but surged above 4,700 megawatts since Saturday after the directive.