- Nigerian Economic Confidence at 12-month Low — Report
The Association of Chartered Certified Accountants and Institute of Management Accountants have said in their report on Global Economic Conditions that Nigeria faces its lowest economic confidence scores in a year, after a fall in the final quarter of 2018.
The accountants in a statement on Wednesday said, “In the midst of a poor near-term outlook, a fall in oil prices is expected to weigh on exports and government revenues. These were highlighted in the poll of 82 Nigerian accountants.”
Speaking on the findings in Nigeria, the head, ACCA Nigeria, Thomas Isibor, stated, “The report finds that despite an improvement in the non-oil economy, consumer demand is soft, restrained by a 23 per cent unemployment rate. Overall GDP growth in 2019 is likely to be very modest at between two per cent to 2.5 per cent. Presidential elections in February increase uncertainty in the near term but the outcome may result in more business- friendly policies.”
The Head of Business Insights at ACCA, Narayanan Vaidyanathan, while speaking on the global results, noted, “Economic confidence over 2018 has been turbulent, with end of calendar year results downbeat compared to the start of 2018.
“It has been interesting to look back at the GECS from the start of 2018, when we recorded economic confidence at its highest since the first survey was issued assessing Q1 2009. Last year was clearly a roller-coaster ride and the outlook for 2019 is also uncertain.”
According to the statement, the global poll of 3,800 accountants showed that all key regions recorded a negative confidence score with signs of growth weakening in the world’s three biggest economies – the US, China and the Eurozone.
Global economic confidence fell for the third consecutive quarter in Q4 2018, ending the year at an all-time low.
It stated, “The survey revealed respondents to be pessimistic about the outlook ahead, with the lowest scores recorded in Western Europe and the Caribbean. The least pessimistic part of the global economy was again South Asia, followed by Africa and North America.”
The GECS Q4 showed that the biggest concern for respondents was again rising costs, with 55 per cent citing it as an issue.
Forty-seven per cent of respondents globally were considering laying off workers, with just 18 per cent considering taking on new workers.
Thirty-nine per cent of respondents were considering scaling back investment in new capital projects, compared with just 16 per cent who were looking to increase investment in new projects.
Crude Oil Hits $71.34 After Saudi Largest Oil Facilities Were Attacked
Brent Crude Oil Rises to $71.34 Following Missile Attack on Saudi Largest Oil Facilities
Brent crude, against which Nigerian oil is priced, jumped to $71.34 a barrel on Monday during the Asian trading session following a report that Saudi Arabia’s largest oil facilities were attacked by missiles and drones fired on Sunday by Houthi military in Yemen.
On Monday, the Saudi energy ministry said one of the world’s largest offshore oil loading facilities at Ras Tanura was attacked and a ballistic missile targeted Saudi Aramco facilities.
“One of the petroleum tank areas at the Ras Tanura Port in the Eastern Region, one of the largest oil ports in the world, was attacked this morning by a drone, coming from the sea,” the ministry said in a statement released by the official Saudi Press Agency.
It also stated that shrapnel from a ballistic missile dropped near Aramco’s residential compound in Eastern Dhahran.
“Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” a ministry spokesman said in a statement on state media.
Oil price surged because the market interpreted the occurrence as supply sabotage given Saudi is the largest OPEC producer. A decline in supply is positive for the oil industry.
However, Brent crude oil pulled back to $69.49 per barrel at 12:34 pm Nigerian time because of the $1.9 trillion stimulus packed passed in the U.S.
Market experts are projecting that the stimulus will boost the United States economy and support U.S crude oil producers in the near-term, this they expect to boost crude oil production from share and disrupt OPEC strategy.
A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.
Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.
A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.
One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.
However, Saudi authorities are yet to confirm or respond to the story.
Brent Crude Oil Approaches $70 Per Barrel on Friday
Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension
Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.
Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.
Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.
While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.
According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.
“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”
Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.
“The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.
“I do believe we’re headed for a much healthier supply and demand environment” she said.
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