Connect with us

Crude Oil

Crude Oil Appreciates on Friday as Chinese Government Eases COVID-19 Restrictions

Oil gained 3% on Friday following reports that China, the world’s largest importer of the commodity, is cutting down on its COVID-19 measures.

Published

on

Crude oil

Global oil prices extended gains on Friday after China announced it was easing part of COVID-19 restrictions.

Brent crude oil, the international benchmark for Nigerian oil, appreciated by 3.1% to $96.53 a barrel at 1 pm Nigerian on Friday.

U.S. West Texas Intermediate (WTI) crude gained 3.3% to $89.34 a barrel, after climbing 0.8% in the previous session.

The easing curbs include shortening quarantine times for close contacts of cases and inbound travellers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers.

“The first small steps towards easing of the regulations that were announced by the Chinese government this morning allowed oil prices to climb again, even though this by no means constitutes a departure from the country’s strict zero-Covid policy, in our opinion,” Commerzbank said.

Prices also picked up on Friday after milder-than-expected U.S. inflation data reinforced hopes that the Federal Reserve would slow down rate increases, boosting chances of a soft landing for the world’s biggest economy.

A weaker U.S. dollar also supported oil prices as it makes the commodity cheaper for buyers holding other currencies.

Still, the benchmark oil contracts were headed for weekly declines due to rising U.S. oil inventories, and lingering fears over capped fuel demand in China amid an uptick in daily COVID cases.

China’s COVID-19 case load soared to its highest since the lockdown in Shanghai earlier this year. Both Beijing and Zhengzhou reported record daily cases.

Besides work-from-home orders reducing mobility and fuel demand, travel across China remained subdued as people wanted to avoid the risk of being caught up in quarantine, ANZ Research analysts said in a note.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Crude Oil

Oil Revenue into Foreign Reserve Dropped From $3bn Monthly in 2014 to Zero in 2022

Published

on

Oil

The official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollar today, the Central Bank of Nigeria (CBN) governor, Godwin Emefiele disclosed.

Speaking at the 57th annual bankers’ dinner organized by the Chartered Institute of bankers of Nigeria (CIBN) in Lagos, the CBN governor noted that there has been a significant loss in foreign reserves due to the naira’s struggle and the rise in demand for forex. 

He added that the sharp increase in the number of Nigerians who are seeking education in foreign countries particularly the UK has resulted in an unprecedented demand for foreign exchange. 

According to him, the number of student visas issued to Nigerians by the UK alone has increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022.

Emefiele also lamented about the level of crude oil theft in Nigeria which has significantly affected the country’s oil production. He noted that crude oil theft has adversely impacted the Country’s foreign exchange reserves.

Investors King had earlier reported that Nigeria has lost its coveted position as Africa’s largest oil producer after oil production dropped below the mark of 1 million barrels per day. 

Nigeria currently trails Angola, Libya and Algeria to the fourth position. 

Meanwhile, on the Naira-4-Dollar scheme which the CBN introduced to boost migrant remittances into the Nigerian economy, the CBN governor noted that the scheme has largely been successful. 

“I am happy to note that, so far, the Naira-for-Dollar scheme has been successful in increasing remittance inflows through our registered International Money Transfer Organisation (IMTOs),” he said.

Emefiele also noted that the introduction of the National Domestic Card Scheme (NDCS) will help to reduce the operating cost incurred by commercial banks while using foreign cards. 

It could be recalled that the CBN earlier announced that it planned to introduce Nigeria-made transactional cards to replace well-known cards such as Visa and MasterCard.

Continue Reading

Crude Oil

Crude Oil Gained 2% as U.S. Oil Inventories Dipped Last Week

Published

on

Crude Oil - Investors King

Crude oil appreciated on Tuesday on signs global supply is declining amid better-than-expected optimism on Chinese economic recovery and a weaker dollar.

But the likelihood that OPEC+ will leave output unchanged at its upcoming meeting limited the gains.

Brent crude futures rose $2.06, or 2.48% to $85.09 per barrel by 1044 GMT. The more active February Brent crude contract rose by 2.02% to $85.95.

U.S. West Texas Intermediate (WTI) crude futures climbed $1.69, or 2.16%, to $79.89.

Support followed expectations of tighter crude supply.

U.S. crude oil stocks dropped by 7.9 million barrels in the week ended Nov. 25, according to market sources citing American Petroleum Institute figures on Tuesday.

Official figures are due from the U.S Energy Information Administration on Wednesday.

And the International Energy Agency expects Russian crude production to be curtailed by some 2 million barrels of oil per day by the end of the first quarter next year, its chief Fatih Birol told Reuters on Tuesday.

On the demand side, further support came from optimism over a demand recovery in China, the world’s largest crude buyer.

China reported fewer COVID-19 infections than on Tuesday, while the market speculated that weekend protests could prompt an easing in travel restrictions.

Guangzhou, a southern city, relaxed COVID prevention rules in several districts on Wednesday.

A fall in the U.S. dollar was also bearish for prices. A weaker greenback makes dollar-denominated oil contracts cheaper for holders of other currencies, and boosts demand.

Fed Chair Jerome Powell is scheduled to speak about the economy and labour market on Wednesday, with investors looking for clues about when the Fed will slow the pace of its aggressive interest rate hikes.

Capping gains, the OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, a source with direct knowledge of the matter told Reuters on Wednesday.

“Market fundamentals favour another cut, especially given the uncertainty over China’s COVID situation … Failure to do so risks sparking another selling frenzy,” said Stephen Brennock of oil broker PVM.

Continue Reading

Crude Oil

Oil Drops on Monday During Asian Trading Session Amid Chinese Covid-19 Protest

Brent crude oil, the international benchmark for oil Nigerian oil, declined by $2.16, or 2.6% to $81.47 a barrel during the Asian trading session after previously hitting $81.16 per barrel.

Published

on

Crude oil - Investors King

Crude oil opened lower on Monday as citizens of the world’s largest importer of the commodity, China protested over tough COVID-19 restrictions.

Brent crude oil, the international benchmark for oil Nigerian oil, declined by $2.16, or 2.6% to $81.47 a barrel during the Asian trading session after previously hitting $81.16 per barrel.

U.S. West Texas Intermediate (WTI) crude oil also dipped by $2.08, or 2.7% to $74.20  per barrel, paring losses from $73.

Last week, Brent crude oil lost 4.6%, its 10-month low while the WTI closed 4.7% lower as global uncertainty continues to dictate commodity prices.

“On top of growing concerns about weaker fuel demand in China due to a surge in COVID-19 cases, political uncertainty, caused by rare protests over the government’s stringent COVID restrictions in Shanghai, prompted selling,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

WTI’s trading range is expected to fall to $70-$75, he said, adding the market could stay volatile depending on the outcome of the OPEC+ meeting and the price cap on Russian oil.

China, the world’s top oil importer, has stuck with President Xi Jinping’s zero-COVID policy even as much of the world has lifted most restrictions.

Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s strict COVID restrictions flared for a third day and spread to several cities in the wake of a deadly fire in the country’s far west.

The wave of civil disobedience is unprecedented in mainland China since Xi assumed power a decade ago, as frustration mounts over his zero-COVID policy nearly three years into the pandemic.

“Bearish sentiment is growing in the oil market with mounting concerns over demand in China and a lack of clear signs from oil producers to further cut output,” said Tetsu Emori, CEO of Emori Fund Management Inc.

“Unless OPEC+ agrees on a further reduction of production quota or the United States moves to reload its strategic petroleum reserves, oil prices may be headed further down,” he said.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, will meet on Dec. 4.

Continue Reading
Advertisement
Advertisement




Advertisement
Advertisement
Advertisement

Trending