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South Africa Inflation Accelerates to 6.4% in October



  • South Africa Inflation Accelerates to 6.4% in October

South Africa’s inflation accelerated to an eight-month high in October as food prices climbed.

The rate increased to 6.4 percent from 6.1 percent a month earlier, Statistics South Africa said in a report released Wednesday in the capital, Pretoria. That’s the highest rate since February. The median estimate of 19 economists surveyed was for inflation of 6.3 percent. Prices rose 0.5 percent in the month.

The South African Reserve Bank has kept its key lending rate unchanged since March as price growth slowed from the 7 percent peak in February and the economy is forecast by the government to expand at the slowest pace this year since a 2009 recession. While inflation expectations have plunged since the start of the year, political uncertainty that causes rand volatility, including attempts to prosecute Finance Minister Pravin Gordhan for fraud, remains a risk to the price outlook.

“What the SARB cares about is the inflation number going forward,” Gina Schoeman, an economist at Citigroup Inc. in Johannesburg, said by phone before the release of the data. “The fact that the peak of inflation happens now in the fourth quarter of the year is painful for the consumer, so GDP growth should slow down.”

The rand weakened 0.2 percent to 14.1077 per dollar by 10:08 a.m. in Johannesburg on Wednesday. Yields on rand-denominated government bonds due December 2026 fell two basis points to 8.94 percent.

The central bank forecasts inflation will return to 6 percent target in the second quarter of 2017. Governor Lesetja Kganyago will probably keep the benchmark repurchase rate unchanged when he announces the MPC’s decision on borrowing costs Thursday, according to the median estimate of 19 economists surveyed by Bloomberg.

Food prices, which have been pushed up by the worst drought in more than a century, rose 12 percent from a year earlier and 0.9 percent from the month before, according to the statistics office.

Core inflation, which excludes food, non-alcoholic beverages, energy and gasoline, quickened to 5.7 percent from 5.6 percent. The median of nine economist estimates was for an unchanged number.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd




The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins



Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020




Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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