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Asian Stocks Drop Amid Rate Bets While Topix Gains on Weaker Yen

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Asian Stocks

Asian stocks fell with crude futures as investors weighed the prospects for higher rates in the U.S., while shares in Japan climbed on speculation for further stimulus.

The MSCI Asia Pacific Index fell 0.1 percent to 139 as of 9:07 a.m. in Tokyo. Japan’s Topix rose 0.4 percent as the yen dropped after Bank of Japan Governor Haruhiko Kuroda said there is “sufficient chance” for more easing in September. Federal Reserve Vice Chairman Stanley Fischer signaled that a 2016 rate hike is still under consideration, echoing hawkish comments from New York Fed President William Dudley last week, ahead of a speech by Janet Yellen later this week at Jackson Hole, Wyoming.

“The Fed is a bit all over the shop so its going to be Janet Yellen’s job this Friday to try to centralize all of these messages into a coherent message that markets can react to,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion, said on Bloomberg Radio. “There’s very little reason the Fed needs to raise rates. I don’t think inflation is getting out of control. It’s going to be interesting to see what the Fed chair has to say.”

Asian stocks have rallied 23 percent from a February low through Friday as lackluster data from the world’s biggest economies fueled speculation central banks will continue to support them with stimulus and loose monetary policy. Investors are looking for clues from the Fed on the timing of potential interest-rate increases. While the odds the Fed will raise borrowing costs in December climbed to 51 percent, traders are betting there’s only a 22 percent chance of tightening next month, data compiled by Bloomberg showed.

Japan’s Topix index added to Friday’s 0.4 percent gain as the yen traded at 100.57 against the dollar. The BOJ won’t hesitate to act based on discussions on the results of a comprehensive review at its September 20-21 board meeting, Kuroda said in an interview published Saturday in the Sankei newspaper.

South Korea’s Kospi index slipped 0.3 percent. Australia’s S&P/ASX 200 Index fell 0.1 percent. New Zealand’s S&P/NZX 50 Index climbed 0.3 percent. Markets in China and Hong Kong have yet to start trading.

Futures on the China A50 Index added 0.1 percent in their most recent trading, as did contracts on the Hang Seng Index. Hong Kong stocks fell Friday, paring their third weekly advance. The Shanghai Composite Index gained 0.1 percent on Friday.

Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index lost 0.1 percent on Friday as a two-month rally ran out of steam amid signs investors are again growing skeptical of the long-awaited rebound in corporate profits.

West Texas Intermediate crude slipped 0.6 percent in early Asian trading after surging 9.1 percent last week. Oil declined after Iraq, OPEC’s second-biggest producer, said it will boost oil exports in the next few days amid a glut of supply.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Crude Oil Dips Slightly on Friday Amid Demand Concerns

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On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.

Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.

Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.

The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.

This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.

Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.

Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.

While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.

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Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal

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Ship Aveon Offshore

Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.

The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.

Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.

However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.

This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.

August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.

The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.

Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.

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Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO

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The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.

Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.

Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.

He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.

Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.

The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.

Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.

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