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Brent falls on sluggish Chinese demand outlook

The price of Brent declined by 0.24%, reaching $82.18 per barrel from $82.38pb yesterday. A cautious outlook on oil demand from China primarily influenced the decrease. Investors remain uncertain about China’s demand prospects, partly due to the absence of significant stimulus plans to support the country’s struggling economy. Additionally, the expected increase in U.S. crude inventory by approximately 2.6 million barrels last week contributed to the downward pressure on prices. China has set its stimulus growth target at 5%, similar to the previous year, but there are concerns about its achievability. In the short-term, Brent will likely be bullish, driven by OPEC+ lingering oil supply cuts, tightening the overall supply.

Global price of sugar fell by 5.24% to $20.62/pound (YTD)

The global sugar price has dropped by 5.24% to $20.62/pound, aligning with the EIU’s forecast of a 9.82% decrease to $21.13/pound in 2024 from $23.43/pound in 2023. This decline is attributed to increased sugar production in Brazil, one of the top global producers. However, this global price reduction is not reflected in the domestic market, where prices have more than doubled, soaring by 102.38% to N85,000 (50kg) in February compared to N42,000 in November 2023. The surge in domestic prices can be traced to elevated import costs, fueled by the continuous depreciation of the naira against the U.S. dollar. According to foreign trade statistics, Nigeria relies on imports for 90% of its raw sugar materials, constituting 1.86% of the total imports in Q3’23. Despite the production of sugar by Dangote sugar refiney, prices are expected to remain high as demand outweighs supply.

These and other burning economic issues were discussed on Channels TV Business Morning programme by FDC’s senior analyst, Dr. Dumebi Oluwole.

Click the link to watch the video.