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Oil Prices Slipped 0.26% in Sympathy with A 5% Slump in Copper Prices

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Thursday, December 07, 2017 / 7:03 PM /FDC 

A 4.4% increase in the benchmark to $47pb indicates an intention to increase expenditure and reduce fiscal spending. This is an impudent but economically rational move.

Oil prices slipped 0.26% in sympathy with a 5% slump in copper prices. Copper is a bellwether commodity in the global commodity index.
 

Burning Economic Issues
  

·    Oil price benchmark hiked to $47pb

·    
Brent slips 0.26% to $61.38pb

·    
Eurobond proceeds boost external reserves to $38.2bn

·    
CBN interventions of $210mn

·    
Parallel market flat at N363/$

·    
Diesel price flat at N200 per litre

 

Economic News

The Good  

·   Naira flat in the forex market

The Bad
·  Fuel queues and political activity coincide

·
   Will exacerbate inflationary pressure

·   
Benchmark production of 2.3mbpd (including condensates) is ambitious

Power Generation analysis & Impact  
December 5th : Average power output sent was 4,054MWh/hour (up 93.5MWh/h)

· 
Gas constraint was 793MW; line constraint was 117MW; frequency management constraint due to loss of DisCo feeders was 1189MW, water management constraint was 150MW

·   
Estimated loss: N1.023mn (annualised at N373.3bn /$0.93mn)

·  
Generation peak surpassed 5000MW
 

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Domestic Commodity Prices Movement
 
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Stock Market 

·        NSE ASI 1.51% to 39,075.30pts

·       
Consumer goods sub index 1.51% to 952.01pts

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Oil prices
·     Brent crude 0.26% to $61.38pb

·    
Prices down on concerns over increasing US crude output

·    
US crude stocks rose to 9.2mb in the week ending Dec 1 –API report

·    
Now reaching close to levels of top producers Russia and Saudi Arabia

Oil markets today
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Outlook – Oil Prices
    
·     US oil production expected to pose a threat to oil prices

·     
Losses will be capped as OPEC and Non-OPEC members restrict output

Outlook – Agric Prices
 

Grains 
  
·      Ample global supplies expected to weigh on prices

Soft

Sugar 
·      Sugar cane output expected to increase in the short-term 

Cocoa
·     Expectations of a global surplus on favourable weather conditions

Related News
1.       Naira Strengthened In October to N363 - $ as Food Inflation Jumped to 15.34%
2.      Nigeria Produced a Meager 348,000 Tonnes of Cotton in 2016
3.     Most Food Prices In Nigeria Have Shrugged off The Currency Gains and Remained Relatively Static
4.      Commodity with a 150-Day Lag Could Be a Game Changer for Economic Diversification
5.      Diesel Prices Increased by 20.4% Despite the Improvement in on-grid Power Generation
6.      Domestic Commodity Prices Responding to the Increased Harvest Output
7.      Harvest Season Has Begun; Expected to Increase Supply and Moderate Prices
8.     Price of Cement is up 8% to N2,700 while Brent Slipped to $56.34pb
9.      Domestic Price of Palm Oil Has Declined by 25% in 12 Months
10.  FG to Bring Down the Price of a 50kg Bag of Rice to N9,000 Within a Month
11.   Price of Cement Dropped by 3.8% to N2,500 per Bag
12.  Oil Prices Climbed Sharply to a 2-year High of $59pb
13.  Cashew Nut Exports Increased Significantly by 463% to $37m in Q2’17
14.  Volatile Oil Prices in August
15.   Oil Prices Hovered Around $55pb Ahead of OPEC Meeting
16.  Higher Price of Oil Has More Than Compensated for Any Cocoa Shortfalls
17.   Oil Price Up to $54.16pb Due to Lower OPEC Production

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