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Hope for Higher Oil Prices

Brent Oil edged towards $28 a barrel before pulling back to the $26-27 price levels at the Asian Session on Friday morning.



Banking crisis imminent over debt by independent oil producers, Crude oil prices up 32% though report still paints gloomy picture Crude oil prices up 32% though report still paints gloomy picture, Hope for Higher Oil Prices., Nigeria’s oil crisis compounded as India’s fuel demand crash by 60% , Nigeria’s Bonny light hits $25 dollars, Saudi pledges more oil cuts 

Brent Oil edged towards $28 a barrel before pulling back to the $26-27 price levels at the Asian Session on Friday morning. This move consolidates oil’s first weekly gain in a month. The Oil bears were losing steam mid-week and gave room for the Oil Bulls to overcome them as market fundamentals favoured an upside in prices. Prices were headed for a decline at the beginning of the week, but positive data in demand, supply cuts from oil-producing nations, and a potential drug that could potentially treat Covid-19 favoured a U-turn in Oil Prices.

While concluding my last article, where are oil prices headed?, I wrote: “As for the Oil Bears, they still lean towards the elephant in the room, which remains the demand destruction caused by the Coronavirus and the availability of storage facilities for excess oil.” This eventually set up an oil-handicapped match at the beginning of the week, as The Bears pitched tent with the Elephant and trumped the Bulls in two days. Eating up almost half of all the gains, the Bulls made last week.

     Hope for Higher Oil Prices.                

            Point A to Point B shows how prices nosedived from Monday to Tuesday.

Brent Oil prices slid to $19 on Monday after it was reported that the United States Oil Fund LP claimed it would sell all of its holdings on W.T. I June contracts. The reason behind their decision was to avoid a similar scenario of negative prices as a result of buyers facing inadequate storage facilities when the futures contract expires. Stephen Innes, a global market strategist at AxiCorp, corroborated their concerns. He said that “The startling June selloff is in part due to the reality of storage facilities filling up rapidly.”

That triggered more selloffs coming into Tuesday as prices further dwindled on the backdrop of information concerning filled storage capacities. There were a lot of storage tankers and vessels carrying oil throughout the week, with no one eager to buy them, which raised concerns of a repeat of the collapse that sent oil below zero for the first time last week.

(READ MORE: Crude oil prices rebound continues on signs of demand recovery)

On Tuesday, oil prices seemed to rebound from Monday’s lows, placing a floor to support prices. The factors behind the upward price movement were the explosion of an oil tanker in Syria and the hopes of financial intervention given to the U.S. energy industry by U.S. Treasury Secretary Steven Mnuchin. Oil, as an event-driven commodity, reacted positively to both news.

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Focus later shifted to the American Petroleum Institute report on Tuesday to determine if prices would rise or fall. (Energy traders and investors always target API and EIA weekly releases to calculate their market positions.) Both releases report weekly measure of the change in the number of barrels in stock of Crude oil, and it’s derivatives. Eventually, the A.P. I announced a build of 9.978 million barrels represented a decline compared to the 13.226 million barrels added the previous week. These reports pleased the Oil bulls as it allayed their fears of rising inventories that would create a lack of storage capacity. The following day the EIA also reported a decline giving optimism for consumption as it reported that the weekly gasoline supplied (an indicator for demand) rose by 549,000 barrels a day the most rise since May 2019. Nick Holmes, a portfolio manager at Tortoise, described the events as “a nice surprise to the market.”

The icing on the cake for the oil prices came on Wednesday, as positive data came from Gilead Sciences concerning the search for a cure to the Coronavirus. White House health advisor Dr Anthony Fauci said on Wednesday that data from a coronavirus drug trial testing Gilead Sciences’ antiviral drug remdesivir showed “quite good news and sets a new standard of care for Covid-19 patients.”

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Adding to the positive mood in the market on Thursday, Western Europe’s largest oil producer, Norway, announced that the country would be cutting production, the country’s first cut in two decades, which adds to the OPEC+ cuts deal which begins on Friday. According to Russian Energy Minister, Alexander Novak, oil companies would cut output by about 19% from February levels. Nigeria, which has been struggling to sell its oil even at $10 a barrel, would ship the lowest volume of its key Qua Iboe crude grade since 2016 in May and June. Warren Patterson, head of commodities strategy at ING, said

“If we see a continuation of this trend in the coming weeks, it could suggest the worst might be behind the oil market,”  

Hope for Higher Oil Prices.

Stanbic 728 x 90

                      Point B to Point C represents the rally in prices from Wednesday.

With a significant drop in production, a rise in demand, and a potential cure, Brent oil surged to over $27.50 at the closing session on Thursday. Prices seem to have stabilized and recovered after the carnage that followed the collapse of prices in the past few weeks, which gives hopes to Nigeria and fellow oil-producing nations.

P.S.: To further confirm victory for the Bulls, view the popular “golden cross” on the chart above.

Dapo-Thomas is a Global Markets analyst and an Energy Trader. As an Oil Analyst at Nairametrics, he focuses mostly on the energy sector, fundamentals for oil prices and analysis behind every market move.


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Dapo-Thomas Opeoluwa is an Investment Banker and Energy analyst. He holds a degree in MSc. International Business, Banking and Finance from the University of Dundee and also holds a B.Sc in Economics from Redeemers University. As an Oil Analyst at Nairametrics, he focuses mostly on the energy sector, fundamentals for oil prices and analysis behind every market move. Opeoluwa is also experienced in the areas of politics, business consultancy, and investments. You may contact him via his email- [email protected]

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CBN includes sugar, wheat on FX restriction list

The CBN is set to include sugar and wheat in the forex restriction list.



CBN forex restrictions on food itemsCBN approves new cheque standard for banks

The Central Bank of Nigeria has announced plans to place sugar and wheat on its FX restriction list.

The plan was disclosed by the apex bank via its verified Twitter handle in a statement credited to the CBN governor, Godwin Emefiele.

The tweet stated: “Sugar and Wheat to go into our FX restriction list. We must work together to produce these items in Nigeria rather than import them. #Emefiele.”

It would be recalled that over the years, the CBN has been reviewing its list of restricted food items to include more items, with the most recent being the addition of maize, a widely-consumed staple food in the country.

What you should know

  • The CBN governor, Mr Godwin Emefiele, had earlier (on Thursday) given this hint while on an inspection visit to the proposed $500 million sugar processing facility in Nasarawa state, belonging to Dangote Sugar.
  • In 2015, the CBN listed 41 items that had been placed on its FX restriction list citing that the move was necessary to conserve the nation’s foreign reserve and boost local production of the items on the restriction list.
  • Some of the items which made the 2015 list are margarine, poultry and eggs, rice, and cement.
  • In 2020, the apex bank included maize in its FX restriction list as it directed all authorised dealers to immediately discontinue the processing of Forms M for maize/corn importation into the country.
  • Nairametrics had also earlier explained in its publication following the new policy shift, that the government’s premise for deciding to restrict FOREX on food is faulty, especially since Nigeria has not attained full food security and the agricultural sector is still struggling.

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Atsu Davoh is building ways for Africans to easily acquire and spend cryptocurrency

Atsu Davoh has gone from failed projects to running one of Ghana’s most innovative startups.



In recent times, the tech space in Africa has experienced immense growth, with the introduction of several key players and disruptors across various sectors. One sector that is also rising is the cryptocurrency space with Africa experiencing greater crypto ownership and trade volume.

The number of Bitcoins processed on a single day reached its highest value at the beginning of 2021, as more people displayed interest in the cryptocurrency. Due to its fast adoption, more fintech players have created platforms that have made trading with cryptocurrency easier. One of such players is Atsu Davoh who calls himself the “product guy.”

Atsu Davoh dropped out of college (Carleton College) in the United States and moved back to Ghana to help innovate on Africa’s financial infrastructure. Atsu first discovered Bitcoin in 2017 during the first boom when it became mainstream. Before then, he and his co-founder Samuel Baohen had been involved in many failed projects.

He developed a USSD system where people could buy bitcoin through their phone numbers, like tying crypto to phone numbers in a native way. This was one of the first iterations of Bitsika.

Atsu was invited to Join Binance Labs Incubator by Yele Bademosi where he got $150,000 after graduating from the incubator. Bitsika went on to raise around $900,000 from investors. This brought the total seed raised to $1,050,000.

This USSD system worked in Ghana but didn’t work in Nigeria. Atsu and his team then pivoted the platform to a donation crowdfunding platform, which allowed people living in other countries to send donations to African nationals in need of the funds before finally building it into a cross-border crypto remittance platform.

Bitsika users can deposit and remit money across multiple currencies using the app, with all monies deposited in Bitsika stored in USD credits or stable-coin.

Bitsika has over 50,000+ downloads on Playstore and processed nearly $40 million in 2020 with $18,872,474 in deposits, $17,890,807 in payouts (withdrawals), and $3,189,834 in internal peer-to-peer transfers.

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Despite a few unfavourable regulations surrounding cryptocurrency in Africa, the market has shown no signs of slowing down as more people are building products that will make trading seamless.

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