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Commodity Prices Maintain Upward Trajectory as Forcados Terminal is Set to Resume Operations

Proshare

Wednesday, June 07, 2017 / 4:48 PM /FDC

Commodity prices have maintained their upward trajectory this week with further spikes in the price of garri and beans. Garri has increased by 23% to N32, 000 while beans has increased by 18% to N26,000.

Oil prices continue to trend downwards to $49.24pb, despite news of severed relationships between four Arab nations and Qatar. On the bright side, Forcados terminal is set to resume operations thereby increasing Nigeria's oil production by approximately 300,000bpd.


Burning Economic Issues
       Oil price falls to $49.25pb

        4 Arab oil countries cut diplomatic ties with Qatar

        Forcados terminal to resume with capacity of 300,000 bpd

        NSE market cap. reaches an 11-month high of N11.2trn

        NAFEX window attracts over $1bn deals in the past 6 weeks

        Naira appreciates to N370/$, NAFEX at N378/$

        Diesel remains flat at N180/ltr

Economic News

The Good
        Oil production expected to increase to support external reserves

        Forcados pipeline will improve power (associated gas)

The Bad
         Spot oil price getting close to benchmark

         Delay in budget signing could impede growth

         Power output declines to 3,345MW/hr (down 289MW)

         Garri up by 23% on herdsmen attack on cassava farms

         Beans prices spike on fasting & seasonal effects

Power Generation analysis & Impact  

June 4th: Average power output was 3,345MWh/hour (down 289MWh/h)

         2,895MW lost from gas, line and high frequency constraints

         Estimated loss: N1.39m (annualised at N500.4bn /$1.25m)

         Increasing high frequency constraints due to grid indiscipline

         Affecting generation at Afam VI, Jebba and Shiroro

  


Domestic Commodity Prices Movement   



 

 

Stock Market

         NSE ASI 3.85% to 32,578.38pts

         Positive sentiment drives market performance



 

Oil prices
         Brent crude 2.73% to $49.25pb

         As US leaves the Paris climate agreement

         Global production levels continue to cap gains from oil prices

         US oil output has surged to 9.3mb over the past 8 months

         Cut in ties between 4 Arab nations and Qatar


Oil markets today 

 



Outlook – Oil Prices  

         Paris agreement means more shale oil

         Oil price volatility to continue

         Middle East crisis could deteriorate


Outlook – Agric Prices 

Grains   
     Market expected to trade bullish as weather conditions are expected to drive market sentiment

Soft

Sugar
     Expectations of a bullish sugar market to persist on lower global output

Cocoa 
      Cocoa price to edge higher as Ivory Coast farmers neglect plantation

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4.   Commodity Prices Maintained Upward Trajectory
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6.   Retail Prices Remained Stubbornly Static as Naira Strengthened at the New Forex Window
7.    Commodity Retailers Leave Retail Prices Unchanged
8.    Oil Prices Took a Hit as Naira Converged Below N400 to a Dollar
9.  Retail Commodity Prices Remained Relatively Unchanged as Manufacturers Capitalize on Margins
10.  The Impact of CBN's Intervention on Commodity Prices Not Yet Seen
11.   The Impact of Global and Domestic Developments on the Commodity Markets
12.  Naira Recovers by 5 percent in 2 days to N495 to 1$; Oil Trades at $57pb
13.  Are The Economic Realities of 2016 to Persist in 2017?
14.  Increasing Consumer Resistance and Declining Income Is Taking Its Toll on Retail Prices
15.   Consumer Effective Demand Negatively Affected By Festive Spending
16.  Domestic Commodity Prices Have Reached Their Peak
17.   Prices of Christmas Sensitive Staple Foods Remain Sticky Downwards
18.  Domestic Commodity Prices Oblivious to a Falling Naira
19.  Domestic Food Prices May Have Reached a Plateau as Consumer Resistance Bites Harder
20. Retailers Brace up for a Bleak Christmas
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