Oil Prices Surge Over 2% Amid U.S. Crude Stock Draw, Sanctions on Russia

Akintunde Oyedokun

Research Analyst

Oil prices climbed more than 2% on Wednesday, with Brent crude settling at $82.03 per barrel and WTI at $80.04 per barrel—both reaching multi-month highs. The surge followed a significant draw in U.S. crude inventories, rising exports, and potential supply disruptions due to new U.S. sanctions on Russia. However, gains were tempered by a ceasefire deal between Israel and Hamas. A weaker U.S. dollar and expectations of lower interest rates also supported prices, while OPEC maintained its forecast for steady oil demand growth through 2026.

UK Inflation and Borrowing Costs Worsen Economic Outlook

UK inflation remains a concern as borrowing costs rise and economic challenges deepen. December’s inflation rate is expected to stay at 2.6%, exceeding the Bank of England’s (BoE) 2.5% forecast. Services inflation may drop slightly to 4.9%.

Fiscal measures, including a £25 billion increase in employer social security contributions, could extend inflationary pressures into 2027. Markets anticipate a gradual easing of the BoE’s Bank Rate by late 2025.

Soaring gilt yields, at their highest since 2008, threaten Finance Minister Rachel Reeves’ fiscal targets, with analysts warning of heightened stagflation risks. Two-thirds of retailers plan price hikes, adding strain to households already facing high living costs.

South Korea’s Jobless Rate Hits 3.5-Year High Amid Political Turmoil

South Korea’s unemployment rate surged to 3.7% in December, the highest since June 2021, up from 2.7% in November, according to Statistics Korea. Employment fell by 52,000 over the year, marking the first decline since February 2021, driven by weakened consumer sentiment and terminated government job programs.

Political uncertainty, including a recent constitutional crisis, has dampened business and consumer confidence, while the Bank of Korea is anticipated to cut interest rates again to support the economy.

Kenya Seeks UAE Support to Extend Regional Railway as China Halts Funding

Kenya is in talks with the UAE to fund the extension of the Standard Gauge Railway (SGR) to connect Mombasa with Uganda and South Sudan, after China withdrew support in 2019. President William Ruto announced plans for a feasibility study on the project, emphasizing its role in boosting trade and regional integration. Kenya and the UAE recently signed an economic partnership agreement to increase trade and investments, with bilateral trade reaching $3.44 billion in 2023. Additionally, Kenya is finalizing a $1.5 billion UAE loan for budget support.

Nigeria’s Inflation Climbs To 34.8% In December Amid Festive Demand, Policy Effects

Nigeria’s inflation rate rose to 34.8% in December, up from 34.6% in November, driven by festive season demand and price increases in food and beverages, the National Bureau of Statistics reported.

Food inflation reached 39.84%, with key contributors including yam, sweet potatoes, rice, and fish. Inflation had eased briefly in 2023 after the naira devaluation’s impact faded but surged again due to petrol price hikes.

The government expects inflation to drop to 15% this year, citing reduced petroleum imports.