Connect with us

Business

Naira Under Siege as Brent Crude Oil Falls Below $70 Per Barrel

Published

on

The price of Brent crude oil has dropped below $70 per barrel for the first time since December 2021, raising concerns about a global economic slowdown.

This steep decline in oil prices is expected to put additional pressure on the Nigerian naira, which has recently depreciated to N1,600 per US dollar.

EKO HOT BLOG gathered that the Global stock markets are showing mixed reactions as investors closely monitor interest rate decisions in the US and Europe.

Tamas Varga, an oil analyst at PVM Oil Associates, noted that while OPEC’s revisions to demand estimates have contributed to the fall in prices, the key factors are concerns over China’s economy—August crude oil imports fell by 7%—and speculation that the US Federal Reserve will implement a modest 0.25% interest rate cut next week.

Swissquote analyst Ipek Ozkardeskaya emphasized that even factors like anticipated interest rate cuts and OPEC+ delaying production increases haven’t been enough to reverse the downward trend. “Oil bulls are unwilling to go against the current momentum,” she added.

EDITOR’S PICKS

Meanwhile, US equities saw declines on Friday following weaker-than-expected jobs data, sparking fears that the Federal Reserve’s delayed action on cutting interest rates could push the economy into a recession. Although markets rebounded on Monday, the recovery began to fade by Tuesday, with the Dow showing losses while the S&P 500 and Nasdaq Composite held on to slight gains.

Traders are also focused on US political developments, including the sole scheduled debate between presidential candidates Kamala Harris and Donald Trump, which could be a pivotal moment for the 2024 election.

Investors are also awaiting Wednesday’s US inflation data, which could be another key test for investor sentiment. AJ Bell’s investment director Russ Mould noted that this data will likely influence the Federal Reserve’s decision on whether to cut interest rates by 25 or 50 basis points at next week’s meeting.

A more significant cut could signal concerns among policymakers about lagging economic growth, especially after Tuesday’s sharp drop in oil prices.

Saira Malik, chief investment officer at Nuveen, highlighted that financial markets are shifting focus from combating inflation to promoting economic growth, with volatility rising as macroeconomic data, particularly labor market indicators, continue to surprise to the downside.

China’s economic troubles are also weighing heavily on market sentiment. Although recent data showed an increase in exports for August, imports have fallen well below expectations.

This follows weaker-than-expected inflation figures for July, raising questions about the effectiveness of efforts to boost consumer demand and business activity in the world’s second-largest economy.

FURTHER READING 

Chinese leaders are now facing pressure to introduce more aggressive stimulus measures, although they have so far refrained from large-scale spending.

In Europe, stocks closed lower, with the European Central Bank expected to cut rates on Thursday. In the UK, new data showed wage growth slowing to its lowest pace in two years, potentially influencing the Bank of England’s decision on interest rates next week.

Key Figures as of 1530 GMT:

  • West Texas Intermediate (WTI): DOWN 4.0% at $65.96 per barrel
  • Brent Crude: DOWN 3.4% at $69.40 per barrel

Stock Markets:

  • New York – Dow: DOWN 0.3% at 40,697.79
  • New York – S&P 500: UP 0.2% at 5,483.84
  • New York – Nasdaq Composite: UP 0.5% at 16,975.09
  • London – FTSE 100: DOWN 0.8% at 8,205.98 (close)
  • Paris – CAC 40: DOWN 0.2% at 7,407.55 (close)
  • Frankfurt – DAX: DOWN 1.0% at 18,265.92 (close)

Asia:

  • Tokyo – Nikkei 225: DOWN 0.2% at 36,159.16 (close)
  • Hong Kong – Hang Seng Index: UP 0.2% at 17,234.09 (close)
  • Shanghai – Composite: UP 0.3% at 2,744.19 (close)

Currency Markets:

  • Euro/dollar: DOWN at $1.1026 from $1.1041
  • Pound/dollar: DOWN at $1.3064 from $1.3075
  • Dollar/yen: DOWN at 142.60 yen from 143.11 yen
  • Euro/pound: DOWN at 84.41 pence from 84.42 pence

Click here to watch our video of the week:

 




Advertise or Publish a Story on EkoHot Blog:

Kindly contact us at [email protected]. Breaking stories should be sent to the above email and substantiated with pictorial evidence.

Citizen journalists will receive a token as data incentive.

Call or Whatsapp: 0803 561 7233, 0703 414 5611




 

 


DISCLAIMER: Opinion articles are solely the responsibility of the author and does not necessarily reflect the views of the publishers Of  EKO HOT BLOG

For publication of your News Contents, articles, Videos or any other News Worthy Materials, please send to [email protected]

For Advert and other info, you can call 08035617233 or send a WhatsApp Message to 08035617233.

Please drop your comments

Copyright © Ekohotblog

MGID