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Greek Central Bank Chief Warns Bailout Delay Risks Rerun of 2015

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  • Greek Central Bank Chief Warns Bailout Delay Risks Rerun of 2015

Greece must immediately reach an agreement with creditors on the release of bailout funds or risk another recession and even more austerity measures, the country’s central bank chief said.

“Any further delay in completion beyond this month will feed a new circle of uncertainty,” Bank of Greece Governor Yannis Stournaras told lawmakers in Athens on Monday, saying this could make reaching a deal harder. “Such a vicious cycle could return the economy to recession and a rerun of the negative developments that took place in the first half of 2015.”

Prime Minister Alexis Tsipras is heading toward a reprise of the antagonistic relationship with Greece’s creditors that previously almost knocked the nation out of the euro. Over the weekend, he lashed out again at the International Monetary Fund, one of the institutions monitoring Greece’s rescue, after auditors insisted on legislation that would trigger further budget cuts if fiscal targets are missed.

Greece “significantly” beat its 2016 fiscal target, the European Commission said Monday, achieving a budget surplus before interest of 2.3 percent of gross domestic product, compared with a goal of 0.5 percent. The surplus will widen to 3.7 percent in 2018, in line with targets, provided the government implements the terms of its 86 billion-euro ($91 billion) bailout program, the Commission said.

That’s at odds with the IMF’s view that the surplus won’t get above 1.5 percent without more cuts.

The EU projections underpin the government’s frustration with the IMF’s stance. European Economics Commissioner Pierre Moscovici will visit Athens on Wednesday for talks with Tsipras and Finance Minister Euclid Tsakalotos to find a way to break the impasse, he told reporters in Brussels Monday.

Germany and the Netherlands have threatened to end the Greek program if a deal isn’t reached that included the IMF. German Finance Minister Wolfgang Schaeuble’s vocal insistence gave the IMF leverage when lobbying for its demands, according to a European official involved in the discussions.

“Tsipras’ room for action is very limited,” said Patrick Esteruelas, head of research at Emso Asset Management. “He can either comply with the creditors’ latest requests and attempt to spin them positively, or call new elections in the knowledge that he will lose them and he will be out of government. He has no other options.”

The yield on Greece’s two-year notes rose 33 basis points to 9.2 percent at 4:02 p.m. on Monday after reaching a five-month high on Thursday. The benchmark Athens Stock Exchange rose 0.7 percent.

The German government’s goal is to complete the Greek bailout program with the IMF on board, Chancellor Angela Merkel’s spokesman, Steffen Seibert, said in Berlin on Monday.

EU officials set an informal Feb. 20 deadline for Greece to complete the review, before the start of a busy national election season that will make additional negotiations with Tsipras’s government politically difficult. Failure means Greece may not be able to repay about 6 billion euros of bonds it has coming due in July.

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

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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