Yesterday, oil prices surged by $1 per barrel. Several considerations have been credited to this recent development, some of them including the ongoing interruptions with the supply of oil and market expectations of increased demand if the Federal Reserve lowers its benchmark interest rates at the end of the meeting today.
Following Hurricane Francine last week, over 12% of the U.S. Gulf of Mexico crude production remains offline, contributing to the upward trend in oil prices. This demonstrates the fourth increase in the last five sessions, following a significant dip that took Brent crude to a near three-year low last Tuesday.
Additional pressure on supply stems from unrest in Libya, where a dispute between rival factions over the central bank control has curtailed oil production and exports. UN-mediated talks to resolve the conflict have so far failed to yield an agreement, further supporting the rise in prices.
In the same vein, oil prices rose on Monday, largely due to the ongoing disruption of production in the U.S. Gulf of Mexico following Hurricane Francine, which helped offset unease over weakening demand in China.
On the other hand, weaker Chinese economic data made available over the weekend dampened the market outlook. China’s industrial output growth in August slowed to a five-month low, while retail sales and new home prices also declined. In addition, China’s oil refinery output fell for the fifth consecutive month, driven by soft domestic fuel demand and shrinking export margins.
Notwithstanding a 1% gain last week, both Brent and WTI crude benchmarks are still below their August averages of $78.88 and $75.43 per barrel, respectively.
In Nigeria, there seem to have been ceaseless talks about the NNPCL and the Dangote Refinery. Recently, the spokesperson of the NNPCL (Nigerian National Petroleum Company Limited) announced that petrol sourced from the Dangote Refinery will be sold at over N1,000 per litre in the northern regions of the country.
This was disclosed in a statement titled ‘NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery Based on September 2024 Pricing.’ He further mentioned that the price could reach as high as N1,019 per litre in states like Borno, and N999.22 in Abuja, Sokoto, Kano, and other northern areas. In southern states like Oyo and Rivers, the price is set at N960 per litre while states like Lagos and others in its environs will sell for N950.
This September has been a notable month for the cryptocurrency world, marked by several significant developments.
Earlier in the month, Zurich Cantonal Bank, Switzerland’s fourth largest bank, began offering trading in Bitcoin and Ethereum. On September 11, the United Kingdom introduced a bill to officially recognise cryptocurrencies as personal property. By September 13, England’s High Court of Justice declared that TETHER (USDT) is indeed a form of property, a decision likely to boost the adoption of cryptocurrencies in the country.
In the same week, Nigeria’s Economic and Financial Crimes Commission (EFCC) secured a court order to freeze about N548.6 million in bank accounts linked to suspected cryptocurrency users on platforms such as ByBit and KuCoin, resulting in the arrest of four individuals. This comes amidst ongoing concerns from the Central Bank of Nigeria regarding the impact of cryptocurrency trading on the naira’s stability and the broader economy. Despite banning Binance from offering fiat and peer-to-peer services, the naira has continued to decline.
This raises questions about why the fiat currencies of England, the UAE, Malta, and Switzerland are not facing similar issues and whether Nigeria’s approach is unique or misdirected. Are the recent arrests a distraction from broader economic troubles, or do they highlight a deeper problem?
There is also a contrast between the Central Bank of Nigeria’s 2021 decision to facilitate cryptocurrency account openings and the current crackdown. Nigerian fintech companies, including Moniepoint, PalmPay, and Paga, have warned that their accounts will be blocked if used for crypto transactions.
Recent market charts reveal that last week’s surge, with Bitcoin spiking to $59,000 and Ethereum reaching approximately $2,600 levels, appears to be a classic case of a ‘dead cat bounce.’ This temporary uptick in prices was largely fueled by the momentum from the recent United States presidential debate. Amid these mixed signals, it’s crucial to navigate the markets with caution and conduct thorough research, as volatility is expected to remain high through the end of the year.
