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Oil Price Up to $54.16pb Due to Lower OPEC Production

Proshare

Wednesday, September 13, 2017 / 12:45 PM /FDC

The naira has depreciated to N367/$ despite a further $250mn intervention by the CBN. The positive news is that oil price is up to $54.16pb due to lower OPEC production.


Burning Economic Issues

Ikeja & Abuja airport concessioned

·         On-grid power output down 100MW/h to 3,472MWh/hr

·         Retail diesel price up sharply to N175-N180/ltr

·         Discos reject average of 1,000MW daily due to financial & infrastructure constraints

·         Oil price up 0.67% to $54.20pb

·         Parallel market rate depreciates to N367/$

·         August inflation data to be released on Friday


Economic News


The Good

·         TCN secures $1bn funding to rehabilitate infrastructure

The Bad


·         Power output is limited due to loss of Disco feeders

·         Diesel price spike will increase transport & distribution costs


Power Generation analysis & Impact  
September 10th : Average power output was 3,472MWh/hour (down 100MWh/h)

·         Gas constraint was 560MW; line constraint was 0MW, frequency management constraint due to loss of DisCo feeders was 2,097MW

·         Estimated loss: N1.28bn (annualised at N471.04bn /$1.14bn)

·         Increasing frequency constraints leading to reduced generation

·         Gbarain and Egbin ST6 are out of service



Domestic Commodity Prices Movement 





Stock Market 

·         NSE ASI 0.81% to 35,6664.94pts

·         Consumer goods sub index 0.37% to 962.38pts



Oil prices
·         Brent crude 0.67% to $54.20pb

·         Due to lower OPEC production, particularly from Saudi Arabia

·         Talks of a potential extension of the OPEC output deal is also supporting prices 

Oil markets today





Outlook – Oil Prices
   

·         Post Irma hype, oil should trade on normal patterns

·  
       Nigeria under pressure to cut output ahead of OPEC meeting in Vienna on September 22

Outlook – Agric Prices 

Grains

·         Price increase will be short-lived due to consistent bearish Fundamentals

Soft

Sugar


·         Prices expected to remain low on growing supplies

Cocoa 

·         Prices to remain soft as ample global supply continues to weigh on prices

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