Crude oil prices ended W/W on a bearish note. The slide is significantly attributed to the soft demand in gasoline, as COVID-19 restrictions in certain emerged markets began to take its toll on crude oil demand.

• New York-traded West Texas Intermediate futures settled at $39.85 per barrel. For the week, West Texas Intermediate dropped 2.5%.
• Not forgetting the British traded oil contract, Brent crude settled at $41.77.
• Both oil contracts suffered heavy losses as reports from U.S oil rig count gained up to 211 from last week’s level of 205.
• Oil rigs, indicators of future production have steadily climbed since the week ended Sept 4, when they stood at 180.

READ: OPEC predicts a deeper drop in global oil demand, based on serious coronavirus challenges

Adding to the weight on the market were estimates that Libyan oil output, mostly offline since January, had risen to 500,000 barrels per day and will likely grow further by October end.

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, gave key insights on moves made by OPEC+ to keep pricing in check, as the virus negatively affects the fragile energy market.

READ: U.S dollar posts best monthly gains in 14 months

“One would have to assume OPEC+ decision will depend on the price/curve shape outcome for November. Traders remain unwavering that OPEC will continue to defend the downside for oil prices via a more calibrated monthly market evaluation and inventory management approach.

“OPEC hopes to tighten near-term balances push spot prices higher than ‘forward prices’, the elusive backwardation, encouraging inventory draws.

READ: Oil prices drop, currently on anemic demand

“My view is until this unambiguously occurs, OPEC will cover the markets back. Positively for OPEC compliance concerns, all the push pump-happy members appear to follow the compensation principles.”

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What to expect

In the days ahead, crude oil prices are expected to be range-bound, as oil traders are now focusing on the most important election coming up in the world’s largest economy in about two weeks’ time. That said, crude oil prices will continue to be influenced by the outcome of the newly registered COVID-19 vaccine.

The Federal government of Nigeria has disclosed that it is expecting an annual output of one million metric tonnes of steel from its $1.5 billion steel plant in Kaduna.

This was disclosed by the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed while inspecting the steel plant facility at the African Natural Resouces and Mines Limited in Kaduna.

READ: Why Ajaokuta Cannot Make Steel

READ: CBN restricts forex for milk import to Nestle, Chi, Friesland, 3 others

According to The Punch, Mrs Zainab Ahmed during the inspection of the facility said that the $1.5 billion steel plant which is now nearing completion, would produce one million metric tonnes of steel annually. She emphasized that the facility is critical to the nation as it is tactical to the looming steel revolution in Nigeria.

READ: Maize Scarcity: Premier Feeds, Crown Flour, 2 others import 262,000MT of Maize

What you should know

The $1.5 billion steel plant built by African Resources and Mines Limited, a subsidiary of African Industries Group (AIG) is at an advanced stage of completion.

The plant which is billed to commence the first phase of production in the mining of Iron ore, and production of Direct Reduced Iron in a matter of months is expected to produce one million metric tonnes of steel annually.

(READ MORE:FG to provide support to Aviation investors)

Why this matters

This development is expected to resuscitate Nigeria’s steel industry which has been lifeless for a while, and help put an end to the importation of steel in Nigeria. This will also reduce the pressure on the Nation’s foreign reserve, and bolster the foreign reserve of the country.

It is expected to boost domestic steel production and attract foreign investors’ participation in the industry, especially auto producers around the world.

However, the facility will create employment opportunities for Nigerians both directly and directly and indirectly.

READ: House of Representatives oppose concession of Ajaokuta Steel Plant

What they are saying

Alok Gupta, the Group Managing Director of AIG, said the firm would be mining iron ore to produce direct reduced iron, which would enable the company to produce higher-grade steel more efficiently.

He explained that the investment by the company in the Nation’s steel industry will dramatically increase domestic production, and this will have multiple effects on the Nigerian economy.

READ: CBN moves to reduce cassava derivatives import worth $600 million  

READ MORE:FG slashes 2020 budget by N318 billion, sends to NASS

The Minister of Finance emphasized that the recent investment in the steel industry by AIG which is about to yield gains both for the company and the economy will attract the auto industries of the world to come into Nigeria and produce cars in Nigeria for Nigerians, and other countries in West Africa.

READ: Kachikwu advocates refineries repair as petrol landing cost reaches N180 per litre

Bottomline

The investment of AIG in the steel industry is expected to drive the country towards steel independence, and pave the way for Nigeria’s steel revolution and the development of the automobile industry in the nation.

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Gold remained under pressure at the pre-opening of London’s trading session on Monday. The pressure seen on the precious metal is largely attributed to the U.S dollar rebounding and expectations growing for the U.S. Congress passage of the latest stimulus deal ahead of the Nov. 3 presidential election.

At the time of writing, gold futures prices traded around 1,905/ounce remaining above the $1,900/ounce. The U.S dollar Index was steady in Asia’s trading, up 0.8%.

U.S speaker, Nancy Pelosi, has set a Tuesday deadline for its lawmakers in passing the deal and is hopeful that such a deadline could be met. President Trump also renewed an offer to increase the stimulus deal package.

READ: Gold prices up as U.S dollar value drops

Quick Fact: Global Investors buy the hard safe haven asset mainly to hedge against inflation and for wealth preservation.

• Humans are emotionally and physically drawn to gold.
• Gold traders, global investors also consider buying gold as a way of diversifying risk, via using futures contracts and derivatives

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on major prevailing fundamentals affecting the precious metal’s prices.

READ: Gold prices shoot up, U.S dollar drops

“Gold prices were pushed down to US$1,900/ounce on Friday, primarily by good retail sales data, which showed sales rising 1.9% m-o-m, above expectations of 0.8%.

“That would seem to suggest that gold could be sensitive to the degree regarding more or less monetary accommodation from the US Federal Reserve, where more robust data will elicit a less dovish response from the central bank.

READ: Ripple owners say XRP will be worth $100

Near term, direction defaults back to the US dollar and US equity market movement. Gold has found a friend in the Yuan, which is holding the US dollar “safe -haven “ambitions in check.

Fiscal policy support has been a critical support factor for gold, and if there is one sure thing, the stimulus is coming.”

READ: London Stock Exchange seals $5billion Borsa Italiana sale