Oil Prices poised to rise above $60 rise on tightening supply, strong demand

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…As Nigeria’s foreign trade increases by 7.7 per cent – NBS***

Oil prices rose on Monday over supply concerns in the Middle East and as the U.S. market showed further signs of tightening while demand in Asia keeps rising.

Brent crude futures, the international benchmark for oil prices, were at 57.84 dollars.

U.S. West Texas Intermediate (WTI) crude futures were at 52.03 dollars per barrel..

The amount of U.S. oil rigs drilling for new production fell by seven to 736 in the week to Oct. 20, the lowest level since June, General Electric Co’s Baker Hughes energy services firm said on Friday. RIG-OL-USA-BHI

Much will depend on demand to guide prices, with the U.S. market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups.

Again, production is still being withheld as part of a pact between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to tighten the market.

In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers.

India imported a record 4.83 million barrels per day (bpd) of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand.

The country’s September imports stood 4.2 per cent above this time last year and about 19 per cent more than in August, ship-tracking data from industry sources and Media Analytics showed.

Given the tightening oil market conditions, many analysts expect prices to rise further.

In the meantime, the value of Nigeria’s total foreign trade in goods increased in the second quarter of 2017 by 7.7 per cent compared to the N5.3 billion recorded for the first quarter.

This was revealed in a National Bureau of Statistics, NBS report, released Wednesday morning.

The monthly external trade value stood at N1.86 trillion in April, N1.99 trillion in May, and N1.84 trillion in June 2017.

The report showed that the total trade was about 37.3 percent higher than the value of trade in the second quarter of 2016 valued at N4.15 trillion.

It also showed that the trade balance stood at a surplus of N506.5 billion in the second quarter of 2017, compared to a surplus of N719.4 billion recorded in the preceding quarter and a trade deficit of N572.12 billion in the corresponding quarter last year.

“The value of total imports stood at N2.6 trillion, with a percentage increase of 13.51 when compared to the first quarter and 9.97 per cent higher than Q2 2016.

“The value of Imported Agricultural goods were 16.01 per cent higher than the value recorded in Q1, 2017 but 61.02 per cent higher than Q 2 2016.

“The value of Raw material imports were 17.4 per cent more than Q1,2017 but 63.20 per cent higher than the value in Q2 2016.

“Solid Minerals imports in Q2 2017, increased by 1,527.44 per cent compared to Q1 2017 but was 1,947.52 per cent higher than Q2 2016.

“Energy goods imports in Q2 2017 were 177.77 higher than Q1 2017 and compared to Q2 2016 when no energy goods imports were recorded.

“Manufactured goods imports value was 9.5 per cent higher in Q2 2017 than the level in Q1 2017 but – 18.33 per cent lower than Q1 2016.

“Other oil products imports value was 6.4 per cent lower than in Q1 2017 and 18.4 per cent higher than Q2 2017,” the report showed.

For export, the total value stood at N3.10 trillion with a percentage increase of 3.2 per cent compared to the total export value of the first quarter and 73.48 per cent over the first quarter of 2016.

“Agricultural goods export value was -1.03 per cent lower than quarter one but 94.05 per cent higher than the second quarter of 2016.

“Raw material exports value increased by 31.8 per cent in Q2 2017 against the level in Q1 2017 but 206.4 per cent higher than Q2 2016.

“Solid Minerals exports value decreased by -27.58 per cent compared to Q1 2017 but was 122.01 per cent higher than Q2 2016.

“Energy goods exports value was 117.84 per cent higher than Q1 2017 but 606.01 per cent higher than the value in Q2 2016.

“Manufactured goods exports were 17 per cent lower than the value in Q1 2017 but 157.16 per cent higher than 2016.

“Crude Oil exports were 2 per cent more than the value recorded in Q1 2017 but 63.2 per cent than Q2 2016.

“Other oil products exports were 12.5 per cent more in value than in Q1 2017 but 117.33 per cent than Q2 2016,” the NBS report revealed.

The report also showed that agricultural goods contributed 4.60 per cent of total trade with a total value of N261.92 billion.

Major traded agricultural products include cashew nuts, sesame seeds, frozen shrimps and prawn, flour and meals of soya beans and ginger.

Agriculture exports accounted for 0.96 per cent of total exports valued at N29.71 billion while agricultural imports accounted for 8.85 per cent of total imports valued at N232.1billion in the quarter under review.

The total value of solid minerals trade stood at N194.6 billion representing 3.42 per cent of total trade in Q2 2017.

Solid Minerals exports stood at N3.06 billion representing 0.1 per cent of total exports while solid minerals imports stood at N191.5 billion representing 11.52 per cent of total imports.

The report also showed that the manufactured goods represents 21.86 per cent of total trade valued at N1.24 trillion in Q2 2017.

Manufactured goods exports stood at N81.5 billion representing 2.63 per cent of total exports while manufactured goods imports represent 44.84 per cent of total imports valued at N1.1trillion.

Raw materials represent 5.63 per cent of total trade valued at N320.6 billion.

Countries involved in export trading activities with Nigeria in the second quarter of 2017 include India, Spain, United States, Netherlands and France with a percentage share of 16.75 per cent, 12.02 per cent, 10.22 per cent, 7.78per cent, and 7.25 per cent, respectively.

Nigeria engaged in import trading activities with China, Belgium, Netherlands, United States, and Italy with a percentage share contribution to total trade in the second quarter at 15.98 per cent, 12.30 per cent, 9.66 per cent, 7.47 per cent, and 6.22 per cent respectively.

Additional report from Premium