Will crude oil or Naira ever recover based on?
- Over supply of crude oil in the international market is causing a global glut
- The strength of the dollar against other international currencies is on the upswing. The US dollar is a major currency for crude oil trade internationally and has continued to appreciate over other world currency including the naira
- OPEC abandoning of output ceiling to crush Russia. OPEC members produce and sell as they like has allow for more volume supply in the international waters with several vessels lined-up to sell and very few buyers
- US excess reserve, increasing crude oil stockpiles, initiation of it export after 40 years and reaching its highest production levels after 80 years. Off course when you export your currency becomes stronger. We know whether conditions are temporal issues.
- Lifting of sanctions in Iran as the country begins to pump crude again
- Devaluation of Chinese currency, its falling stock market and reduction in the country’s purchasing power in crude consumption as a result of a deepened economy.
- Stability in Iraq and Sudan
- International commodity prices have also come low creating a bitter experience for exporters
In all these there is always a breakeven point for a slide down, but many believe it may not come soon, but people need to remedy their own personal pocket even when there are serious indication for this breakeven and turn around in our own market and investment climate. The question is when will this situation change?
Nigeria economy is heavily dependent of crude oil price. It goes as far as affecting the prices of shares on the Nigeria stock exchange as well as the price dollar for importing raw materials for companies. The cost of goods on the shelf is already hiking with companies are already declaring losses and laying off staff in order to stay afloat and individuals are tightening their belt and looking out for plan B in case anything goes red or at least try to sustain their expenditure in the face increasing local commodity prices.
These are investors’ indices for investment with comparative timing knowing the fundamentals can put you on the upswing for a large profit margin or create a back up that can cushion the effect of an economic slide down. Time to do something for yourself get free product on