Oil prices surge over supply disruption

Oil prices reversed early declines yesterday, induced by concerns of tighter Russian and Iranian supply in the face of escalating Western sanctions.

Brent crude futures advanced 60 cents, or 0.79 per cent.

It sold for $76.90 a barrel while U.S. West Texas Intermediate (WTI) crude was up 50 cents, or 0.68 per cent. It sold for $74.06.

The Federal Government’s oil price benchmark in the 2025 budget estimates is $75 per barrel.

It seems market participants have started to price in some small supply disruption risks on Iranian crude exports to China, said UBS analyst Giovanni Staunovo.

Concern over sanctions tightening supply has translated into increased demand for Middle Eastern oil, reflected in a rise in Saudi Arabia’s February oil prices to Asia, the first such increase in three months.

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In China, Shandong Port Group on Monday issued a notice banning United States-sanctioned oil vessels from its network of ports, three traders said, potentially restricting blacklisted vessels from major energy terminals on China’s east coast. Shandong Port Group oversees large ports on China’s east coast, including Qingdao, Rizhao and Yantai, which are major terminals for importing sanctioned oil.

Meanwhile, cold weather in the U.S. and Europe has boosted heating oil demand, though oil price gains were capped by global economic data. Euro zone inflation accelerated in December, an unwelcome but expected blip that is unlikely to derail further interest rate cuts from the European Central Bank.

“Higher inflation in Germany raised suggestions that the ECB may not be able to cut rates as fast as hoped across the eurozone,” said Panmure Liberum analyst Ashley Kelty.

Technical indicators for oil futures are now in overbought territory and sellers are keen to step in again to take advantage of the strength, tempering additional price advances, said Harry Tchilinguirian, Head of Research at Onyx Capital Group.

Market participants are awaiting more data this week, including the U.S. December non-farm payrolls report on Friday, for clues on U.S. interest rate policy and the oil demand outlook.

Oil prices surge over supply disruption

Kano-Kaduna railway project gets $254.76m China bank loan approval

The China Development Bank (CDB) has approved a loan of $254.76 million (€245 million) for the Kano-Kaduna railway project in Nigeria.

According to information on the bank’s website, the funding is expected to provide crucial financial support for the ongoing development of the railway, ensuring the project proceeds without delays.

The Kano-Kaduna railway is a standard-gauge line spanning 203 kilometres, designed to connect Kano, a major commercial hub in northern Nigeria, to the nation’s capital, Abuja.

Once completed, the railway will offer residents a safe, efficient, and convenient transportation alternative, significantly enhancing regional connectivity.

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Beyond improved mobility, the railway project is expected to stimulate economic activity along its route.

It is also designed to promote the growth of related industries and generate numerous job opportunities for Nigerians during both the construction and operational phases.

The project has been highlighted as a key initiative under the Third Belt and Road Forum for International Cooperation.

It is being executed by the China Civil Engineering Construction Corporation (CCECC), with financing provided by the CDB.

According to the bank, construction is progressing smoothly.

The CDB emphasised its commitment to continued collaboration with the Nigerian government to ensure the timely disbursement of funds and effective management of subsequent phases of the project.

The bank stated, “Going forward, it will closely coordinate with Nigerian partners to ensure the smooth disbursement of subsequent loans and effective post-loan management.”

Kano-Kaduna railway project gets $254.76m China bank loan approval

Naira exchanges for N1,650/$ in parallel market

The Naira yesterday appreciated to N1,650 per dollar in the parallel market from N1,665 per dollar on Monday.