Dec 7 (Lagos) - Crude oil prices were recovering this morning after being routed in yesterday's session when US output grew to counter the production cuts coming from OPEC+ cartel. Crude oil prices were routed more than 4% yesterday just as Russian President made a state visit to the de-facto head of OPEC, Saudi Arabia. Russia is a member of OPEC+ countries. This meeting brought together a major part of global crude oil producers.
USA is now the global leader in crude oil output. Lower crude oil prices could become to norm over the next year as US enters its Presidential election year and the current administration is desperate to bring inflation down. They are likely to keep crude oil production levels elevated to make sure prices stay lower.
This morning Brent crude is trading near the $75 a barrel level at the time of writing this article and WTI crude oil is just below the $70 a barrel mark.
The decline in crude oil prices will be welcomed by US consumers as well has high demand countries like India and China. Low crude oil prices could lead to higher productivity in the world and as a result stocks were higher in China and India this morning.
In Nigeria also consumers at the pump will be happy to see crude oil prices falling so maybe the petrol and diesel prices can come down a bit. The Government on the other hand may want to see higher crude oil prices so that the Country can bring in more US Dollars.
Stocks in Lagos were up sharply in yesterday's session led by Banks with major gains in First Bank (
FBNH ) &
ETI while others like
GTCO ,
ZENITHBANK ,
ACCESSCORP ,
FIDELITYBK &
UBA were up strongly as well. There was no major news to push the stocks higher. The Treasury bills primary market auction ended well below the discount rates expected by investors and the CBN did not mop up even 50% of the available funds so that could fuel another rally next week but today we (easykobo analyst) expect a pull back due to lower crude oil prices will set the mood down to reality a little bit.
reporting for easykobo.com on Thursday, December 7 2023 from Lagos, Nigeria