The Nigerian Stock Exchange’s market capitalisation advanced by N52bn at the close of trading on the Exchange’s floor on Wednesday after recording losses of various degree on 21 stocks.
The market capitalisation appreciated to N9.418tn from N9.366tn recorded on Tuesday; the NSE All-Share Index also rose to 27,421.83 basis points from 27,272.14 basis points.
A total of 391.374 million shares worth N3.395bn were traded in 3,103 deals.
The market recorded gains in 19 stocks.
Ikeja Hotel Plc, UAC Property Development Company Plc, International Breweries Plc, Dangote Flour Plc and Wema Bank Plc emerged as the top five gainers.
The shares of Ikeja Hotel appreciated by N0.09 (five per cent) to close at N1.89 from N1.80, while those of UAC Property closed at N3.90 from N3.72, gaining N0.18 (4.84 [per cent).
Similarly, the share price of International Breweries Plc closed at N18.08 from N18.05, gaining N0.83 (4.6 per cent), while that of Dangote Flour rose to N4.17 from N3.99, appreciating by N0.18 (4.51 per cent).
Wema Bank shares closed at N0.70 from N0.68, gaining N0.02 (2.94 per cent).
Other gainers were Okomu Oil Palm Plc, Glaxo SmithKline Consumer Nigeria Plc, Custodian and Allied Plc, Nigerian Breweries Plc, Access Bank Plc, Total Nigeria Plc, Stanbic IBTC Holdings Plc, Ecobank Transnational Incorporated Plc, United Capital Plc, Guaranty Trust Bank Plc, Continental Reinsurance Plc, United Bank for Africa Plc, Nestle Nigeria Plc and Dangote Cement Plc.
On the other hand, 7UP Bottling Company Plc, Cap Plc, Fidson Healthcare Plc, May and Baker Nigeria Plc and Livestock Feeds Plc were the top five losers at the close of trading.
7UP share price depreciated by N11.64 (9.74 per cent) to close at N107.86 from N119.50; while that of Cap closed at N33.40 from N37, losing N3.60 (9.73 per cent).
Fidson Healthcare recorded a drop of N0.09 (4.84 per cent) on its share price to close at N1.77 from N1.86; while May and Baker shares slid to N1.09 from N1.14, losing N0.05 (4.39 per cent).
The share price of Livestock Feeds also fell to N0.93 from N0.97, losing N0.04 (4.12 per cent).
Other losers were Aiico Insurance Plc, Diamond Bank Plc, Skye Bank Plc, PZ Cussons Nigeria Plc, Transnational Corporation of Nigeria Plc, NEM Insurance Company Nigeria Plc, Dangote Sugar Refinery Plc, Sterling Bank Plc, FCMB Group Plc, Fidelity Bank Plc, Eterna Plc, Nascon Allied Industries Plc and Honeywell Flour Mill Plc.
Flour Mills Nigeria Plc, Airline Services and Logistics Plc and Vitafoam Nigeria Plc also recorded losses on their share prices.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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