On Sunday, Nigerian oil marketers said the pump price of petrol may reduce marginally this month, going by the fall in global crude oil prices, Themoneymetrics reports.
According to them, since the cost of petrol has been largely determined by the price of crude oil, the recent marginal plunge in crude oil cost could lead to a drop in petrol price in Nigeria.
Findings by our correspondent on Sunday showed that Brent, the global benchmark against which Nigeria’s crude is priced, dropped in price by $1.66 or 4.06 per cent as at 13.20pm Central Standard Time.
The commodity (Brent) traded at $39.27 per barrel at the same time, while the cost of crude in the OPEC Basket was put at $39.94 per barrel.
Crude oil in OPEC basket dipped by $1.77 when compared with what it traded on the preceding day.
Speaking to our correspondent in Abuja on Sunday night, the National President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said the prediction of marketers was that petrol price could dip in October.
He, however, said that oil marketers, particularly members of PETROAN, would continue to call for an enlarged stakeholders meeting in determining the price of petrol across the country.
Gillis-Harry said, “We will continue to insist that the arm-chair pattern of fixing prices is not correct. You saw the confusion it caused the last time. We are going to have a meeting with them (government) that will involve all the stakeholders.
“So, hopefully by then we should be able to have proper information to give to you on the latest in price.
“However, based on the slide in crude oil prices, there is the suspicion that petrol price may come down.”
The Petroleum Products Pricing Regulatory Agency commenced the deregulation of the downstream oil sector in March.
Although it provided petrol price bands in some months after March 2020, the PPPRA eventually stopped issuing price bands, as it explained that the downstream sector had been fully deregulated.
Gold maintains shine after advancing for two days
The bullion asset regained its lustre after a 2.2% drop recorded in the past week,
Gold stayed on course at the second trading session of the week after advancing for two days, as metal traders awaited testimony from U.S Fed Chief, Jerome Powell.
At the time of drafting this report, the bullion asset traded at $1,807.24 an ounce after rising 1.9% over two days.
The U.S Fed Chief’s semi-annual report at the U.S congress today and the next day will be monitored by metal traders for further policy guidance, and his assessment of the economic recovery at the world’s largest economy.
The bullion asset regained its lustre after a 2.2% drop recorded in the past week, as traders refocus on rising inflation expectations.
In an explanatory note to Our source, Stephen Innes, Chief Global Market Strategist at Axi, gave valuable insights on how the precious metal managed to stay above the $ 1,800-ounce price level.
“It was a strange world seeing the commodity locomotive racing at full steam, but gold left-back at the station. But correlations are looking more normal today after yesterday morning signal gold was trading slightly higher in delayed response to USD weakness. A weaker US dollar remains one of the primary lift-off balloons.
Gold built on Friday’s modest rally, clearing and holding above the USD1,800/oz level. USD weakness was likely the key factor behind gold’s recovery.”
What to expect: The U.S congress may vote on the US$1.9 trillion stimulus package in the coming days, which should hold gold’s appeal as inflation concerns and reflation appeal suggest gold is a good hedge.
World’s largest oil producer loses four million barrels per day
Oil traders are going bullish on the black liquid hydrocarbon, over the unprecedented cold snap in a leading American energy hub, Texas
Oil prices were all fired up at the first trading session of the week.
The unusual winter storm playing in key areas of the world’s largest producer of oil saw an estimated four million barrels per day of oil output shut down in Texas and other states, alongside 21 billion cubic feet of natural gas output.
Oil traders are going bullish on the black liquid hydrocarbon, over the unprecedented cold snap in leading American energy hub, Texas. Also giving crude oil bulls enough gas to stay at least above the $60 price level is the recent progress against the COVID-19 pandemic, in turn, raising hopes for energy demand recovery.
What you should know
- Most recent data retrieved from the Energy Information Administration reveal the United States is currently the world’s largest producer of oil, producing about 19.45 million barrels per day or 19% of the world’s total crude oil production in 2019.
- At press time, Brent crude futures rallied by 1.13% to $62.84 a barrel with the Brent crude contract turning over in February 21 to the May 21 contract.
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave key insights on other macros weighing on oil prices at least for the near term amid high positivity prevailing in global financial markets
“What began as a power issue for a handful of US states quickly turned into a global supply shock for the oil markets. Still, the re-start of shut-in US production and news that the Biden administration is exploring diplomatic re-engagement with Iran have contributed to a cooling of oil prices, despite the bullish inventory data.
“But “the day after”, see oil prices nudging higher amid ongoing evidence of recovery in global demand, mostly good news on the Covid-19 trends and anticipation of a nearly 2 trillion US stimulus designed to get people working again quickly.”
What to expect
- The sharp surge in crude oil prices before OPEC+’s all-important meeting next month means the calculus for the OPEC+ alliance becomes more complicated.
- However, as oil output stays constrained, crude oil stockpiles are dropping and with COVID-19 vaccines promising a return towards normalcy at the end of the day, expectations continue to run high for oil markets.
Gold prices jump above $1800/ounce, drops 2% W/W
Gold futures settled up $1.2%, at $1,813.05 after it had dropped as low as $1,784.60 on Thursday.
The yellow metal stayed above $1,800 an ounce at the last trading session of the week after tumbling beneath the key support level a day ago.
Still Gold finished the week down some 2% due to setbacks dealt by the surging dollar and rising U.S. Treasury yields.
- Gold traders are battling hard in support of the bullion asset to hold the $1,800 line amid recent price actions reading revealing “a significant build in gold shorts could trigger a drop towards the $1,750 level.
- Gold futures settled up $1.2%, at $1,813.05. It had dropped as low as $1,784.60 on Thursday after a third straight weekly decline in U.S. jobless claims created the impression that the labor market in the world’s largest economy may be suffering from exhaustion
Stephen Innes, Chief Global Market Strategist at Axi in a note spoke on the prevailing macros weighing hard on gold relatively;
“The current climate has been brutal for gold. The US dollar has been rallying for most of the week, equities on the front foot and steepening the yield curve. Stimulus and pandemic optimism could lead the US Federal Reserve to start tightening monetary policy a little earlier than expected, and gold could drop further.
“The yellow metal has posted its largest drop since early January, falling >2% to below the key $1800 level, back to where it was in November. There is support at $1764, while a rally could reclaim $1800, before $1811 and $1838.”
What to expect: Gold traders would be watching to see if the precious metal would again breach below $1800/ounce price level with Silver in tow it could trigger a larger precious metal meltdown where then gold momentum might feed off Silver’s sell-off.
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