Oil Price Slips on OPEC Deal Concerns; Price of a Bag of Rice is Tapering


Friday, October 28, 2016 10:27am / fdc

Oil price slipped on OPEC deal concerns but recovered to $50pb following the news of a drawdown in US crude inventories.

In Nigeria, Forcados export terminal was restored and the Escravos disruption was only to the gas pipeline. All told oil production is expected to remain stable.

The good news is that the price of a bag of rice is tapering, currently at N20,000.00.  Garri and palm oil prices are marginally higher.  The inflation data for October is likely to stay stubbornly high.

The attached/below report summarizes the commodity price movements for this week.

Burning Economic Issues

• Nigeria’s Forcados terminal production restored

• Aggregate borrowing ceiling set at $22.08bn in 2017

• FG to float Diaspora bond soon, targets $21bn

• Guinness Nigeria to increase local sourcing by 44%

• Naira crashes again: Parallel market (N470/$), Interbank (N307.28/$)

• US GDP growth estimated to be sharply higher at 2.5%

Domestic Commodity Prices

• Mixed movements in the domestic market this week

• Rice falls to N20,000 for a 50kg bag

• Garri increased to N15,000, Palm oil up to N17,000

• Impacting the CPI levels in October


Oil prices slips to $49

• Brent crude 2.74% to $49.98pb

• WTI 2.65 % to $49.18pb

• Prices declined on concerns over OPEC’s output deal

• Losses were capped by the draw in US crude inventory

• Stockpiles fell by 553, 000 barrels

• Contrary to the 1.7mb build up projected by analysts

Outlook – Oil Prices

• Higher US growth rate will inspire the Fed to increase interest rates

• Stronger dollar will push oil prices lower

• All eyes are on November OPEC meeting

• Arab producers (Saudi Arabia, UAE and Kuwait) hold the ace

Outlook – Agaric Prices


• Weaker euro will spur demand for grain futures in Europe

• Slow grain harvests will support prices in the near-medium term  


• Slowing demand for sugar despite deficit will weigh on futures

• Galamsey in Ghana and crop disease in Ivory coast will prop up prices

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