16 Jun

Daily Watch – Inflation continues to slow, Oil production accelerates

  • Annual inflation in Nigeria eased for the fourth straight month in May, falling to 16.25 percent from 17.24 percent in April, the National Bureau of Statistics said in a report published on Thursday. A separate food price index showed inflation at 19.27 percent, down from 19.30 percent in April. “The rise in the (food) index was caused by increases in prices of meat, bread and cereals, fish, potatoes, milk cheese and eggs as well as vegetables such as tomatoes,” the statistics office said. Annual inflation fell in April and two months prior to that. The fall in February was the first drop in inflation in 15 months.
  • The Senate has expressed concern over an imminent blackout in the Northern due to zero gas supply to the 215MW Kaduna power plant. Lawmakers unanimously adopted a motion moved by the Chairman, Senate Committee on Petroleum (Gas), Senator Bassey Akpan, at the plenary on Thursday. In the motion, Senator Akpan criticised the alleged plan to convert the plant from being gas-powered to diesel-powered. He insisted that the use of gas to power turbines was key all over the world due to its environmental friendliness and cost implication, and in line with the United Nations Chatter on Green Energy and Climate Change.
  • Nigeria’s crude oil production has hit a one-year high, according to a report released by OPEC. The report attributed the increased production output to the resumption of loadings at Forcados terminal in Delta state. After militants attacked the pipeline terminal in February 2016, Shell declared force majeure, a legal clause that allows it to stop shipments at the terminal without breaching contracts. According to the report, OPEC crude oil production increased by 336 thousand barrels per day (tb/d) with outputs increasing the most in Libya, Nigeria and Iraq. “Rising output from Nigeria, Libya and the North Sea kept the Atlantic basin well supplied with light sweet crude, weighing on crude values. Nigerian crude production rose to 1.68 mb/d, the highest level in more than one year. This followed the restart of Forcados loadings for the first time since October 2016,” the report said. OPEC said oil prices dropped at the beginning of May because increased production from Libya, Nigeria and US raised worries about excess supply.
  • Investors have traded $2.2 billion at a new currency window introduced by the CBN six weeks ago to allow them to deal on the naira at market-determined rates, the bank’s spokesman Isaac Okorafor told Reuters on Thursday. Okorafor said the bank’s participation ay the investors’ window was limited to less than 30 percent of trades, noting that the regulator will ensure it sustains intervention on the currency market to shore up the naira.