Crude oil prices rallied to $70.43 last week Friday, ending the week bullish for the first time since November 2018. This means Brent closed last week 2.9% higher. Meanwhile, oil prices maintained its bullish run yesterday, as it closed at $70.76 a barrel.
Brent oil prices rose, as expectations of tight global supply outweighed pressure from rising U.S. production and less robust global demand indicators.
Similarly, U.S. West Texas Intermediate (WTI) crude settled 98 cents higher at $63.11 a barrel on Friday, rising 1.6% to a new five-month closing high. WTI posted its fifth consecutive weekly gain, rising 4.9% over 5 days.
Both contracts hit new five-month highs
Oil prices are rallying in reaction to the U.S. employment report. According to John Kilduff, a partner at Again Capital LLC in New York:
“Signs of global economic slowdown had been a headwind for oil prices, but this morning’s report seemed to dispel at least some of those concerns.”
Meanwhile, Crude futures received a boost from news of a potential slowdown in crude production out of Venezuela, as U.S. sanctions and energy blackouts hit the OPEC nation’s oil industry.
Over-delivering Saudi Arabia is OPEC’s Bull
The combined production of all 14 OPEC members reportedly stood at 30.4 million bpd last month, down by 280,000 bpd compared to February and the lowest level of OPEC production since February 2015.
However, Saudi Arabia’s production cut has pushed down OPEC’s crude oil production by 570,000 bpd from February to 30.23 million bpd in March. According to the monthly report of S&P Global Platts survey, OPEC’s current production represents the lowest production in more than four years.
OPEC’s de facto leader and biggest producer, Saudi Arabia, reportedly cut its crude oil production in March to the lowest level since February 2017. The Country delivered on its promise to cut more than pledged in the pact and slashed output by another 280,000 bpd last month, with March production at 9.87 million bpd.
The U.S ‘NOPEC bill’ – Saudi Arabia threatens to ditch dollar oil trades
Saudi Arabia is reportedly threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits.
The No Oil Producing and Exporting Cartels (NOPEC) which was first introduced in 2000, is a U.S. Congressional bill aimed at removing the state immunity shield. By extension, allowing OPEC and its national oil companies to be sued under U.S. antitrust law for anti-competitive attempts to limit the world’s supply of oil and the consequent impact on oil prices.
Report has rightly indicated that the chances of the NOPEC bill coming into force are slim and Saudi Arabia would be unlikely to follow through. Sources within the Saudi’s oil industry reportedly disclosed:
“let the Americans pass NOPEC and it would be the U.S. economy that would fall apart. The Saudis know they have the dollar as the nuclear option.”
Trump’s factor and U.S trade influence
The NOPEC bill has gained momentum since President Trump came into office. Prior to Trump’s election into office, he reportedly backed NOPEC in a book published in 2011. However, despite Trump’s continued tirade against OPEC, he has not yet voiced support for NOPEC as president.
On the contrary, while global trade has been advocating for moves to diversify trade from the dollar, economic superpowers are equalling plotting moves to dilute U.S influence over the world economy. Hence, it would resonate well with oil giant like Russia and consumers such as China and the European Union (EU) if Saudi’s move to ditch dollar sail through.
Saud Arabia’s influence and its Oil firm “Aramco”
Saudi Arabia reportedly controls a 10th of global oil production, roughly on par with its main rivals – the United States and Russia. Its oil firm Saudi Aramco holds the crown of the world’s biggest oil exporter with sales of $356 billion.
Recently, it was reported that Saudi Arabian national petroleum and natural gas company, Saudi Aramco, recorded $111.1 billion in profit for FY 2018 as the world’s most profitable company.
Prices to rise as Venezuela’s Blackout lingers alongside Iraq Production Cut
An earlier report has shown that OPEC’s oil production in March 2019 fell to its lowest level since February 2015, as Saudi Arabia cut more than it had pledged. Also, Venezuela continued to struggle amid U.S sanctions and a major blackout.
The power blackouts currently witnessed by Venezuela has crippled its oil industry and exports. The country reportedly saw its production drop to a 16-year-low, at 740,000 bpd.
Also, OPEC’s second-biggest producer Iraq, cut its production by 100,000 bpd, making its production reduced to 4.57 million bdb in March. This, however, was still slightly above Iraq’s 4.512 million bpd production cap under the deal.
Job listings spike up by 183% in April –Jobberman
Jobberman released figures showing a 183% increase in job listings on its platform in April 2020, thanks to its #UnityInAdversity campaign.
Notable job placement website, Jobberman, has released figures showing that there was a 183% increase in job listings on its platform in the month of April 2020.
This increase, according to Jobberman, is a result of the #UnityInAdversity campaign which allowed companies to post job listings and access Jobberman’s database of over 2.2 million professionals across Nigeria for free, rather than paying the usual fees. This was the company’s way of showing support to businesses and individuals, amid the economic challenges which resulted from the COVID-19 pandemic.
According to the release from Jobberman, this campaign came at a cost to the company since it was trading off its revenue by offering for free, the same services which formed its major source of income.
“At the beginning of March, Jobberman Nigeria saw a 70 percent decrease in job listings due to the reduced economic activity caused by the enforced lockdown and many companies shutting down recruitment budgets to cut costs. Jobseeker sign-ups also decreased by 17 percent. Jobberman took the bold step to put employers’ and job seekers’ needs first” the statement read.
The campaign, which is billed to run till June 30, has paid off greatly as data for April’s job listings alone was more than that of the entire Q1 2020 period. See a breakdown of the job listings below:
- Almost a fifth of the positions (18.79%) were listed in the tech sector
- Banking, finance, and insurance accounted for 9.27%
- Education and training had 6.78 percent
- IT & Software positions accounted for 11.69%
- Sales had 13.32%.
Note that with the increase in job listings, job seeker sign-ups also increased by 39% in April alone.
Speaking about the campaign, the CEO of Jobberman Nigeria, Hilda Kragha said, “The COVID-19 pandemic has made the process of connecting talent to opportunities more complicated and we are fully aware of the strain businesses and individuals in Nigeria are facing. We plan to be here for the next 10 years so making this small sacrifice to help our users navigate these difficult times is something that we think is definitely worth doing”.
Kragha also noted that the campaign has encouraged healthy competition as candidates strive to show themselves qualified for the position.
“We have found that soft skills such as emotional intelligence, business etiquette, time management, which are often overlooked and underestimated in Nigeria, can make a big difference. We know the power of soft skills and we are committed to empowering individuals with the training and soft skills they need to succeed in the workplace” she explained further.
Sequel to this, the company also launched a free soft skills training programme to help job seekers (between age 18 and 30 years) acquire the needed soft skills and better their chances of gaining employment.
Gold prices rise, as President Trump decides on China today
Gold prices jumped on Friday as China and America’s drift deepened over further moves by China to impose security laws on Hong Kong
Gold prices jumped on Friday as China and America’s drift deepened over further moves by China to impose security laws on Hong Kong, lifting the allure of safe havens amid market uncertainties.
U.S. President Donald Trump’s top economic adviser cautioned the Chinese lately that Hong Kong, which has enjoyed special privileges, may now be treated like China when it comes to financial matters and trade.
Trump, who had earlier vowed a tough action on China, will hold a news conference today to announce what measures his administration will take.
Spot gold gained about 0.1% at $1,719.63 per ounce, and U.S. gold futures rose 0.4% to $1,734.60.
The friendship between the Americans and Chinese had weakened, since the outbreak of the Covid-19 pandemic.
President Trump and President Jinping of China have accused each other as a result of issues surrounding the COVID-19 pandemic.
Why do Investors buy Gold? Global Investors most often buy the safe-haven asset in times of uncertainty and use it to hedge against cash (inflationary macros).
“The possible U.S. response could range from a tearing up of the Phase 1 trade deal and fresh tariffs on China, to milder travel or financial sanctions on Chinese officials,” said Shane Oliver, chief economist at Australian wealth manager AMP to Reuters News.
“It is seen as a major threat to the rally we’ve had and the recovery,” “If it’s at the relatively mild end, then I don’t think it would derail the recovery bull market, but if it’s at the more extreme end with tariffs and harsh treatment of Hong Kong, then I think it gets more problematic,” Oliver added.
AfDB board denies asking Adesina to step down, as Obasanjo says the bank risks being hijacked
“The Bureau of the board of governors informs the public that it has not taken any decision. Everyone must allow the Bureau to do its work and allow due process to reign.”
The Bureau of the Board of Governors of the African Development Bank (AfDB) has denied media reports making the rounds that AfDB’s president, Akinwumi Adesina, has been asked to step down pending the completion of the probe and determination of allegations against him.
The bank’s top governing board members said that they have not asked Adesina to step down from his position as president, even as the board continues to review the fallout of complaints by some whistleblower. The statement from the Chairman of the bank’s board of governors, Niale Kaba, said:
“The Bureau of the board of governors informs the public that it has not taken any decision. Everyone must allow the Bureau to do its work and allow due process to reign. All governors will be carried along in resolving the issue.’’
Kaba also stressed that there was no governance crisis at AfDB as was being speculated in certain quarters. He confirmed that the Bureau of the Board of Governors of AfDB met on Tuesday, May 26, after the request by the U.S Secretary calling for an independent probe. The essence of the meeting was to take a closer look at the allegations by the whistleblowers against Akinwumi Adesina, said allegations which had already been investigated by the ethics committee of the bank.
Kaba further disclosed that even though no decision has been taken yet, the bureau assures that it is treating the case with the utmost seriousness that it deserves.
Adesina, who maintains his innocence of those allegations, had stated that a fair, transparent, and just process will vindicate him.
In a related development, former Nigerian President Olusegun Obasanjo had thrown his weight behind Adesina and kicked against the demand by the United States of America for a fresh, independent probe of the AfDB President who had earlier been cleared by the ethics committee of the bank.
In his letter to 12 former African Presidents, Obasanjo said that Africa must stand up and not allow its institutions to be unduly controlled by non-African countries.
Obasanjo said that the bank has witnessed tremendous growth under Adesina’s leadership and has doubled its capital base since he took over.