Commodities
Oil traders go wary on energy demand, mutant strains of COVID-19
Brent crude was down by 0.39% to trade at $51.17 a barrel and West Texas futures dropped lower by 0.23% to $48.12 a barrel.
Crude oil prices drifted lower at the first trading session of the week.
The plunge in oil prices is partly attributed to the increased concerns seen by a significant number of oil traders on the world’s energy demand, thus it dampened the latest macro revealing that U.S. President Donald Trump signed off on the latest COVID-19 stimulus deal.
READ: Oil prices slump, OPEC+ meets today
What you should know: At the time of writing this report, Brent crude was down by 0.39% to trade at $51.17 a barrel and West Texas Intermediate futures dropped lower by 0.23% to $48.12 a barrel.
That said, crude oil prices posted their first weekly loss since October as the B.1.1.7 strain of COVID-19, alongside the discovery of another mutant strain of the virus believed to originate from South Africa, which raised more fears of more countries imposing lockdowns.
READ: Gold prices up on U.S Central Bank’s will to keep interest rates low
- The United Kingdom has already imposed tighter lockdown measures throughout most of the country in order to limit the spread of the virus, while the second largest economy, China, suspended passenger flights to the United Kingdom.
- However, macros revealing that President Trump has reportedly signed the $2.3 trillion COVID-19 pandemic aid and spending package, thus averting a partial U.S government shutdown, calmed some nerves in the energy market.
READ: Okomu Oil Plc may have flattered to deceive with its sterling H1 performance
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on macros coming from COVID-19 fronts calming the nerves of oil traders from selling below the $50 price level.
“The oil market rallied along with broader markets supported by a flat-out bullish EIA inventory report.
READ: Covid-19: First recorded case hits Antarctica
“And thanks to medical experts warning against overreaction to the new virus strain, there is a greater understanding it will not trigger a new wave of severe lockdown blockades around the world as France showed the way by quickly re-opening trade and transport links with the UK, which provided a major sigh of relief to oil markets for a lockdown perspective.”
Commodities
Lagos Commodities Exchange to start gold trading
The move is in support of the Federal Government’s effort to reduce dependence on oil, diversify the economy and boost the country’s foreign exchange earnings.
The Lagos Commodities and Futures Exchange has concluded plans to commence trading of gold with the admission of Dukia Gold’s diversified financial instruments, backed by gold as the underlying asset.
The move is in support of the Federal Government’s effort to reduce dependence on oil, diversify the economy and boost the country’s foreign exchange earnings.
Dukia Gold said the financial instruments, which would be in form of exchange-traded notes, commercial papers and other gold-backed securities would enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the government to diversify external reserves and create jobs across the metal production value chain.
While making the disclosure, during a Pre-Listing media interactive session in Lagos on Thursday, the Chairman of Dukia Gold, Mr Tunde Fagbemi, applauded the Ministry of Mines and Steel Development and the Security and Exchange Commission (SEC) for supporting trading of gold in Nigeria.
What the Chairman of Dukia Gold is saying
He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us to facilitate our infrastructure development, expand capacity and create fungible products.
This has the potential to shore up Nigeria’s foreign reserve and create an alternative window for the preservation of pension funds. Gold-backed security is a hedge against inflation and convenient preservation of capital.”
Fagbemi pointed out that the company has refinery services to smelt metals with the capacity to meet local and international demand.
Going further, he said, “As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located.’’
Context of Gold Mining in Nigeria
It can be recalled that the Federal Government, in June 2020, commissioned the operations of Dukia Gold and Precious Metals Project (DGPMP). The project is expected to enable Nigeria to mine its gold reserves properly, trade responsibly and refine locally.
The Vice President, Prof. Yemi Osinbajo, while performing the virtual commissioning of the project, said Nigeria has potential reserves of 200 million ounces of gold reserves.
Osinbajo said that he believed that the Dukia gold project would encourage the emergence of smaller-scale mining companies which, for the first time, would have a transparent and welcoming market for their mined gold and precious metals.
Commodities
Oil prices surge over China’s growing appetite for energy
British based contract ticked up by 0.3% to trade at $63.59 a barrel while the WTI futures edged near $60 a barrel.
