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RMB Raises Hope on Nigeria’s Economic Recovery in 2017

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  • RMB Raises Hope on Nigeria’s Economic Recovery in 2017

With 2016 ending as one of the challenging years for the country, there are better expectations in 2017, going by the budget plans and the recent production cut agreed by international oil producers, RMB Nigeria has said.

Besides, the bank expressed optimism that there will be more transparent and open foreign exchange activities in the new year, which would help to attract foreign inflows and reduce the pressure on the apex bank as the major supplier to the interbank market.

The Managing Director of RMB Nigeria, Michael Larbie, who made the observation at its Client Appreciation Evening, in Lagos, noted that the challenge of recession, rising inflation foreign exchange shortage brought every economic activity to near standstill.

“These impacted our manufacturing clients as they shut in production because of shortage of raw materials. There is a negative real interest rate. In fact it has affected the broader economy.

“Clients have cut back long term investments due uncertainty and correspondingly, these slow down also speaks more of our individual and industry performance- slowing growth. We will surely put 2016 behind and look ahead with optimism in 2017.

“But in 2017, there is hope, because there are some areas in the market that we can build on like the working capital and trading. Clients at a time are taking Naira loans, rather than the usual demand for dollar loans.

“We did take advantage and benefitted from that. We did get involved with trade and working capital transactions in 2016. We financed port jetty in Port-Harcourt and petrochemical plants’ projects.

“The production cut deal by oil producers is a positive for the economy and business transactions and we do hope that the budget will be given accelerated attention to complement our projections,” he said.

According to him, the speedy attention to budget process would ensure that funding goes to projects that would boost economic activities.

“Government is a big player in the economy and where it is failing, definitely it is going to affect overall performance. So, we do hope that budget implementation effectively rolls through to 2017, until the new one begins. The expansionary budget is the right thing to do to stimulate the economy and put it back on track,” he said.

Larbie pointed out that the import substitution strategy through diversification is the right thing to do now, saying that we must question the rationale to depend on oil for years.

“Granted, liberating from oil is going to take time, but we must start somewhere to stir the course, especially from the quick wins- rice production and agric mechanisation.

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

Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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Crude Oil

OPEC Says Uncertainties Remain High in 2021

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OPEC Says Uncertainties Remain High in 2021

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.

In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.

However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.

Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.

But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.

The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.

Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”

“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.

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Crude Oil

Brent Crude Oil Rose to $56.25 Per Barrel

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Brent Crude Oil Rose to $56.25 Per Barrel

Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.

Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.

Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.

Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.

Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.

China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.

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