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Oil prices bullish despite bearish IMF report

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1650445203 476 Crude oil

The black liquid rebounded at the start of the London trading session on Wednesday from sharp losses in the previous session. This is as concerns about tighter supplies from Russia and Libya dominated the news airwaves, while industry data showed a drop in U.S. crude inventories last week.

The global benchmark, the Brent crude futures is bullish by 1.12%, currently trading $108.45 a barrel, while the United States benchmark, the West Texas Intermediate (WTI) crude futures is also bullish by 1.12%, currently trading $103.20 a barrel.

Both benchmarks fell by 5.2% in volatile trading on Tuesday after the International Monetary Fund (IMF) on Tuesday slashed its forecast for global growth by nearly a full percentage point, citing the economic impacts of Russia’s war in Ukraine and warning that inflation was now a “clear and present danger” for many countries.

What you should know

  • Global oil prices have been volatile since the start of the war and it has been pulled higher as a result of tighter supply outlook following sanctions on Russia, the world’s second-largest oil exporter and a key European supplier, after its invasion of Ukraine, which Russia still calls a “special operation.”
  • However, despite the ongoing war, a softer global economic outlook and ongoing COVID-19 lockdowns in China, that have reduced demand for oil which is also in turn, weighing on prices.
  • OPEC+ monthly report revealed that on the supply side, the Organization of Petroleum Exporting Countries and its allies (OPEC+), produced 1.45 million barrels per day (bpd) below its production targets in March, as Russian output began to decline following sanctions imposed by the West.
  • Russia produced about 300,000 bpd below its target in March at 10.018 million bpd, based on secondary sources, the report showed.
  • Other outages added to the concerns about supply. Libya’s National Oil Corporation declared force majeure at the Brega oil port on Tuesday, saying it was unable to fulfil its commitments towards the oil market.
  • In the United States, crude stocks fell 4.5 million barrels last week, according to market sources citing American Petroleum Institute (API) figures on Tuesday, against expectations of an increase in inventories.

Warren Patterson, ING’s head of commodities strategy based in Singapore stated, “The sell-off yesterday on the back of the IMF revisions was probably overdone. I believe that risks are still skewed to the upside, with the potential for further disruptions from Libya, but more importantly, the potential for an EU ban on Russian oil.”

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Naira depreciates at I&E window despite significant improvement in FX supply

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Naira dollar

Wednesday, 18th May 2022: The exchange rate between the naira and the US dollar closed at N419.25/$1 at the official Investors and Exporters (I&E) window, representing a 0.18% depreciation.

Naira retracted its initial gain recorded in the previous trading session as the exchange rate between the naira and the US dollar depreciated by 0.18% to close at N419.25/$1 compared to N418.5 recorded on Tuesday. Meanwhile, FX supply surged by 95.55% to $201.34 million.

Similarly, the exchange rate against the US dollar depreciated by 0.33% on Thursday morning at the peer-to-peer market, trading at a minimum of N605/$1 compared to N603/$1 recorded as of the same time the previous day.

Meanwhile, the exchange rate at the parallel market remained stable at N590 to a dollar. This is according to information obtained from BDCs operating in Nigeria.

Nigeria’s external reserve fell further below the $39 billion threshold on Tuesday as the level recorded a 0.09% decline to stand at $38.88 billion from $38.92 billion recorded as of the previous day. The last time Nigeria’s external reserve level was below $39 billion was seven months ago, 8th October 2021 specifically.

The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Trading at the official NAFEX window

Naira depreciated against the US dollar on Wednesday by 0.18% to close at N419.25/$2 compared to N418.5/$1 recorded on Tuesday.

  • The opening indicative rate closed at N418/$1 on Wednesday 18th May 2022, 57 kobo depreciation compared to N417.42/$1 recorded on Tuesday, 17th May 2022.
  • Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N419.25/$1, while it sold for as low as N410/$1 during intra-day trading,
  • A total of $201.34 million in FX value exchanged hands at the official Investors and Exporters window on Wednesday.
  • According to the data from the FMDQ, forex turnover improved by 91.55% from $105.11 million recorded on Tuesday to $201.34million on Wednesday, 18th May 2022.

Crypto market update

The crypto market closed trading activities on Wednesday on a bearish note as the flagship asset and most capitalized cryptocurrency lost 380 basis points to close at $29,269, triggering a 4.51% downturn in the overall crypto market capitalization.

Ethereum also recorded a 5.88% price decline on Wednesday to trade at $1,966, while Solana dipped 10.03% to trade at $51.2725. LUNAUSD and Uniswap both lost 9% and 8.23% of their worth on Wednesday to close at $.000169 and $5.02 respectively.

Meanwhile, the new SEC crypto and digital asset regulation has drawn several reactions, both positive and negative remarks from crypto enthusiasts across the country and outside the shores of the country. Some of these players in the digital asset space have commended the SEC for a first step while some of the analysts believe the regulation has some sore points in the draft.

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Business News

Naira depreciates at I&E window despite significant improvement in FX supply

Published

on

1652946305 302 Naira dollar

Wednesday, 18th May 2022: The exchange rate between the naira and the US dollar closed at N419.25/$1 at the official Investors and Exporters (I&E) window, representing a 0.18% depreciation.

Naira retracted its initial gain recorded in the previous trading session as the exchange rate between the naira and the US dollar depreciated by 0.18% to close at N419.25/$1 compared to N418.5 recorded on Tuesday. Meanwhile, FX supply surged by 95.55% to $201.34 million.

Similarly, the exchange rate against the US dollar depreciated by 0.33% on Thursday morning at the peer-to-peer market, trading at a minimum of N605/$1 compared to N603/$1 recorded as of the same time the previous day.

Meanwhile, the exchange rate at the parallel market remained stable at N590 to a dollar. This is according to information obtained from BDCs operating in Nigeria.

Nigeria’s external reserve fell further below the $39 billion threshold on Tuesday as the level recorded a 0.09% decline to stand at $38.88 billion from $38.92 billion recorded as of the previous day. The last time Nigeria’s external reserve level was below $39 billion was seven months ago, 8th October 2021 specifically.

The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Trading at the official NAFEX window

Naira depreciated against the US dollar on Wednesday by 0.18% to close at N419.25/$2 compared to N418.5/$1 recorded on Tuesday.

  • The opening indicative rate closed at N418/$1 on Wednesday 18th May 2022, 57 kobo depreciation compared to N417.42/$1 recorded on Tuesday, 17th May 2022.
  • Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N419.25/$1, while it sold for as low as N410/$1 during intra-day trading,
  • A total of $201.34 million in FX value exchanged hands at the official Investors and Exporters window on Wednesday.
  • According to the data from the FMDQ, forex turnover improved by 91.55% from $105.11 million recorded on Tuesday to $201.34million on Wednesday, 18th May 2022.

Crypto market update

The crypto market closed trading activities on Wednesday on a bearish note as the flagship asset and most capitalized cryptocurrency lost 380 basis points to close at $29,269, triggering a 4.51% downturn in the overall crypto market capitalization.

Ethereum also recorded a 5.88% price decline on Wednesday to trade at $1,966, while Solana dipped 10.03% to trade at $51.2725. LUNAUSD and Uniswap both lost 9% and 8.23% of their worth on Wednesday to close at $.000169 and $5.02 respectively.

Meanwhile, the new SEC crypto and digital asset regulation has drawn several reactions, both positive and negative remarks from crypto enthusiasts across the country and outside the shores of the country. Some of these players in the digital asset space have commended the SEC for a first step while some of the analysts believe the regulation has some sore points in the draft.

... Naira depreciates at I&E window despite significant improvement in FX supply Read More on ... Naijaonpoint.

WATCH NOW

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Continue Reading