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Retail Prices Remained Stubbornly Static as Naira Strengthened at the New Forex Window

Proshare

 Thursday, April 27, 2017/ 7:14 PM /FDC

The naira strengthened at the new forex window (investors and exporters) to close at N380/$. At the parallel market the naira also appreciated to N386/$. This concentric movement in exchange rates is beginning to reflect a more realistic value of the naira.

Retail prices have continued to remain stubbornly static except for diesel where the wholesale price has crashed by 5% to N190 per litre. In the oil markets, Bonny Light climbed marginally to $51.82pb on the news of lower than expected US output.

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

Burning Economic Issues 
 

•FAAC shared in April: N466.93bn  

•External reserves crosses $31bn - CBN Governor  

•Naira strengthens at the new window to close at N380/$  

•N388/$ at the parallel market  

•Oil price increases marginally by 0.43% to $51.82pb on lower that expected US output  

•Average power from the grid down 269MWh/h to 3720MWh/hour    

•Wholesale diesel price sharply lower at N190 per litre

Economic News  

The Good
 

        Parallel market rate appreciates to N388/$    

         External reserves at $31bn is naira positive    

         Lower diesel price reduces operational cost for manufacturers    

The Bad  

• Oil production falls to 1.5mbpd in March from 1.6mbpd in February  

• Retail prices still sticky      

Power Generation analysis & Impact  

April 25th: On grid power output was 3720MWh/hour (down 269MWh/h)   

• Total Power constraints: 2,163MW due to gas and line constraints   

• Estimated loss: N1,038bn (annualised at N373.68bn /$0.93bn)    

•System collapse in the early hours of 26th April 

•Despite increasing gas supply , due to grid constraints, power sent out remains limited   

   

Domestic Commodity Prices Movement   


    

 Stock Market


Oil prices  

• Brent crude by 0.43% to $51.82pb

• Marginal increase driven by lower than expected US crude stock at 897,000 barrels

• Oil price under pressure with rising US crude production


• OPEC’s oil production at 31.9mbpd remains close to record high levels 

Oil markets today

 
   

  
Outlook – Oil Prices
   

• Bearish outlook for oil due to unrelenting US supply 

• US increasing oil production will continue to set the tone for oil price 

• Russian oil production expected to increase to the highest in 30 years  

Outlook – Agric Prices 

Grains  
• Supply expected to fall due to unfavourable weather conditions  

Soft

Sugar
      Subsidies for sugar producers expected to dampen prices further

Cocoa
      Prices will remain under pressure from huge global supply from Ivory Coast 


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2.    
Oil Prices Took a Hit as Naira Converged Below N400 to a Dollar
3.  
Retail Commodity Prices Remained Relatively Unchanged as Manufacturers Capitalize on Margins
4.    
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5.    
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6.    
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7.    
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