… As Oil races towards $80 as U.S. drilling rises***
The Naira on Monday again depreciated against the dollar at the parallel market in Lagos, losing 1.1 points, to exchange at N362.3, weaker than N361.2 posted on Friday, just as the Pound Sterling and the Euro closed at N497 and N429, respectively.
At the Bureau De Change (BDC) window, the naira was sold at N362 to the dollar, while the Pound Sterling and the Euro closed at N497 and N429, respectively; while ironically oil took a surge towards $80 per barrel.
Trading at the investors’ window saw the naira close at N361.57, while it was sold at N305.8, CBN rate.
Currency traders express confidence that the naira would witness better times as the currency- swap deal between Nigeria and China gets underway. Industry were however unimpressed as the expressed pessimism that political spending in the months ahead might affect the stability of the Naira.
Meanwhile, oil prices steadied below 3-1/2 year highs on Monday as resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran, while rising U.S. drilling pointed to higher North American production.
Brent crude was up 20 cents at 77.32 dollars a barrel by 1315 GMT and U.S. light crude rose 10 cents to 70.80 dollars.
Both oil futures contracts hit their highest since November 2014 last week at 78 dollars and 71.89 dollars a barrel, respectively as markets anticipated a sharp fall in Iranian crude supply once U.S. sanctions bite later this year.
It is unclear how hard U.S. sanctions will hit Iran’s oil industry.
A lot will depend on how other major oil consumers respond to Washington’s action against Tehran, which will take effect in November.
China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran’s nuclear programme and led to a relaxation of economic sanctions against Iran and companies doing business there.
The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organisation of the Petroleum Exporting Countries and non-OPEC producers, including Russia.