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Euro-Area Industrial Production Rises in August

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  • Euro-Area Industrial Production Rises in August

Euro-area industrial production rose to the highest in nine months in August following the surge in demand for capital goods.

According to Eurostat, industrial production increased by 1.4 percent in August and 3.8 percent from a year ago. The highest increase since November 2016.

While, this is better than the 0.5 percent and 2.6 percent year-on-year growth predicted by economists. It also revealed growing demand for capital goods and indicates continuous job creation.

July data was revised up from 0.1 percent to 0.3 percent and to 3.6 percent year-on-year from 3.2 percent previously estimated. Meaning industrial production is growing at a faster pace than initially thought.

Similarly, capital goods production rose to 3.1 percent in the month, while production of durable consumer goods increased by 1.3 percent.

Rising business confidence and growing economy continued to bolster new investment in the region.

The Euro-area economy remained vibrant even with the growing Catalonia unrest and the Brexit conundrum. The economy expanded faster in the second quarter with the manufacturing sector rising to the highest in almost 7 years in September and the inflation rate gradually picking up.

“The stronger euro has so far barely dented export growth and domestic demand conditions were generally seen to have improved,” said Chris Williamson, chief economist at IHS Markit. “With the upturn being accompanied by rising inflationary pressures, expectations of an imminent announcement from the ECB in relation to tapering of policy stimulus will intensify.”

However, weak wage growth remains a concern even though more jobs are been added to the economy, consumer prices are still below the European Central Bank’s 2 percent target. These are some of the reasons the apex bank is yet to announce the commencement of its balance sheet normalization like the U.S. Federal Reserve. But strong incoming data may force the central bank to do so soon.

The Euro currency remains stable against counterparts.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Commodities

Agric Industries Take Interest In Unlocking Nigeria’s $10bn Palm Oil Export Potential

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Some agric-focused industries and firms have indicated interest in enhancing Nigeria’s agricultural productivity and competitiveness through the nation’s $10 billion palm oil export potential.

At the launch of a new report by a research and advisory firm, Vestance, significant untapped opportunities within Nigeria’s oil palm sector were revealed.

Discussing how the nation could regain its lost glory in palm oil production and exportation, stakeholders in the sector emphasised the need for government agencies, private sector investors, smallholder farmers, research institutions, and development partners to work together to help change the narratives in the palm oil sector.

Titled “Reclaiming Lost Glory: Nigeria’s Palm Oil Renaissance,” the report, which was unveiled in Lagos disclosed that Nigeria, despite being a major producer historically, currently exports only $1.34 million in palm oil, ranking 78th globally, while importing $372 million annually

Vestance’s Research Lead, Razaq Fatai, said the report illustrates the immense opportunities lying dormant in the country’s underutilised oil palm plantations, noting that by capitalising and rejuvenating these plantations, Nigeria could generate over $10 billion in export revenue alone.

He explained that Nigeria’s palm oil production began to decline during the country’s civil war between 1967 and 1970, saying, it is now time to begin to reverse the decline and put the sector back on track.

Speaking at a panel session on ways to revitalise the oil palm sector, experts proffered means by which challenges confronting the palm oil sector could be tackled.

In his submission, the Managing Director, SWAgCo (O’dua Investment Group), Dr. Adewale Onadeko, said Nigeria should embrace an agro-industrial cluster strategy, adding that essential infrastructure such as seeds, fertilisers, extension services, processing, and storage facilities should be prioritised if the expected gains could be realised.

Another panellist, Dr. Bayo Ogunniyi, Country Programme Analyst for International Fund for Agricultural Development, highlighted the myriad challenges facing smallholder farmers, particularly the lack of access to finance and the prevalence of old, low-yield seeds.

He underscored the urgent need for Nigeria to distribute high-quality seeds to smallholder farmers to enhance production levels.

Ogunniyi also pointed out that the oil extraction rates of smallholder palm oil processors are alarmingly low, often falling below 15 percent, compared to the 25 percent extraction rates achieved by modern processing mills. Improving these extraction rates is crucial for maximising the output from Nigeria’s palm oil sector.

In his own contribution, CEO of BulkDirect, Ramses Najem, emphasised the importance of situating processing facilities closer to the farms to reduce transportation challenges.

Other speakers at the report launch called for a nationwide adoption of high-yield seeds to boost production, investment in modern processing facilities to increase oil extraction rates, and the development of strategic transportation networks to streamline the supply chain.

 

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Crude Oil

Brent Rises to $73 Per Barrel as Oil Producer Iran Plans Another Attack on Israel

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The international crude benchmark, Brent Crude, rose to $73 per barrel as it rose 29 cents or 0.4 percent to settle at $73.10 a barrel on Friday on expectations that Iran will attack Israel from Iraq in the coming days.

The US West Texas Intermediate (WTI) crude gained 23 cents, or 0.3 percent to settle at $69.49.

The market has seized on the news from Thursday that Iran is preparing to attack Israel from Iraq within days.

However, market analysts point out that the impact on oil prices may be muted as the attacks signify a show of strength rather than action. This is why there wasn’t a much price boost.

Iran’s backed groups are currently fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. So, this has seen the two countries engaged in a series of retaliatory strikes within the broader Middle East warfare set off by fighting in Gaza.

In a related development, the US asked Lebanon to declare a unilateral ceasefire with Israel to revive stalled talks to end hostilities between Israel and Hezbollah.

Another factor supporting prices is the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+ which could delay plans to increase supply in December.

The group has always maintained that its planning production cuts rollback would depend on market conditions.

The US, the world’s largest oil producer has been seeing an increase in its production with Exxon Mobil saying its global output hit an all-time high while Chevron also said its US production hit a record high.

This aligns with projections that annual output was on track to hit a record 13.2 million barrels per day in 2024 and 13.5 million barrels per day in 2025.

Last month, OPEC’s production increased by 370,000 barrels per day in October after Libya’s political resolution and its resultant 500,000 barrel-per-day output boost.

Libya’s output recovery led OPEC to raise its production to nearly 30 million barrels daily, even as Iraq, Iran, and Saudi Arabia lowered their output.

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IPMAN Pushes Back on Dangote’s Call to End Petrol Imports, Cites High Costs at Refinery

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The Independent Petroleum Marketers Association of Nigeria (IPMAN) has addressed concerns about its members purchasing petrol outside the country.

Investors King reported that Aliko Dangote, the owner of Dangote Refinery, urged Nigerian oil marketers to stop importing petrol and instead lift supplies from his refinery.

Dangote mentioned that the refinery currently has over 500 million liters of petrol in storage and that marketers’ reluctance to lift his product is causing financial losses.

In an interview on Friday, IPMAN’s National Assistant Secretary, Yakubu Suleiman, stated that the association cannot compel its members to buy petrol from the Dangote Refinery due to the deregulated nature of the market.

According to Suleiman, IPMAN members cannot patronize Dangote if his petrol is more expensive than other suppliers. He explained that, for profitability, marketers must seek the most affordable fuel sources.

Suleiman also accused Dangote of trying to monopolize the oil market, noting, “Prices are determined by international pricing. Dangote should ideally be communicating daily about his pricing. But he can’t enforce that we buy only from his depot without stakeholder engagement.”

Suleiman added, “IPMAN cannot simply instruct our members to purchase solely from Dangote Refinery. We operate in a deregulated system. Marketers will source products where prices are cheaper and advise members accordingly.”

He explained, “If Dangote sells at N1000 per liter, and there are other sources selling at N900, we can’t direct marketers to choose Dangote simply because it’s his product. We prioritize lower prices and profit.”

Suleiman also noted that last week, Dangote’s price was higher than other sources, explaining, “For example, last week he offered N995 per liter, with additional costs to transport the product to depots. Independent marketers can’t sell at a profit under these conditions, so we must consider Nigerians’ interests.”

This comes after IPMAN President Abubakar Garima countered Dangote’s allegation that marketers were boycotting his refinery.

He pointed out that marketers cannot load petrol from Dangote’s refinery in Lagos despite having paid ₦40 billion to the Nigerian National Petroleum Company Limited (NNPCL).

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