Oil Prices Slipped 0.26% in Sympathy with A 5% Slump in Copper Prices

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An oil pump jack is seen at sunset in a field outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann

A 4.4% increase in the benchmark to $47pb indicates an intention to increase expenditure and reduce fiscal spending. This is an impudent but economically rational move.

Oil prices slipped 0.26% in sympathy with a 5% slump in copper prices. Copper is a bellwether commodity in the global commodity index.

Burning Economic Issues
· Oil price benchmark hiked to $47pb

· Brent slips 0.26% to $61.38pb

· Eurobond proceeds boost external reserves to $38.2bn

· CBN interventions of $210mn

· Parallel market flat at N363/$

· Diesel price flat at N200 per litre

Economic News

The Good
· Naira flat in the forex market

The Bad
· Fuel queues and political activity coincide

· Will exacerbate inflationary pressure

· Benchmark production of 2.3mbpd (including condensates) is ambitious

Power Generation analysis & Impact
December 5th : Average power output sent was 4,054MWh/hour (up 93.5MWh/h)

· Gas constraint was 793MW; line constraint was 117MW; frequency management constraint due to loss of DisCo feeders was 1189MW, water management constraint was 150MW

· Estimated loss: N1.023mn (annualised at N373.3bn /$0.93mn)

· Generation peak surpassed 5000MW


Stock Market
· NSE ASI 1.51% to 39,075.30pts

· Consumer goods sub index 1.51% to 952.01pts

Oil prices
· Brent crude 0.26% to $61.38pb

· Prices down on concerns over increasing US crude output

· US crude stocks rose to 9.2mb in the week ending Dec 1 –API report

· Now reaching close to levels of top producers Russia and Saudi Arabia

Oil markets today
Proshare Nigeria Pvt. Ltd.

Outlook – Oil Prices
· US oil production expected to pose a threat to oil prices

· Losses will be capped as OPEC and Non-OPEC members restrict output

Outlook – Agric Prices

Grains
· Ample global supplies expected to weigh on prices

Soft

Sugar
· Sugar cane output expected to increase in the short-term

Cocoa
· Expectations of a global surplus on favourable weather conditions

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