Oil winners-losers in small EM: pre-OPEC+, post ytd rally

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

List of latest Ponzi schemes in Nigeria

These are the latest and past Ponzi scams and shady investment products that Nigerians are putting their monies into. What...

After the 34% rally in oil price (Brent) since its end-December 2018 low and in advance of this weekend’s preliminary OPEC+ meeting (17-18 March), we briefly revisit data on macroeconomic exposure (net fuel import or export positions) and equity market performance in small Emerging markets.
Oil winners-losers in small EM: pre-OPEC+, post ytd rally
The performance of Kazakhstan, Malaysia, Nigeria, Oman, Qatar (under-performing oil exporters) and Egypt, Kenya (out-performing oil importers) appear the most incongruous (when viewed through the lens of oil exposure alone). Among oil-related individual stocks, Dana Gas (Egypt, Iraq-KRI), Seplat (Nigeria), Sabic (Saudi) and PTT (Thailand) are notable under-performers relative to oil price, and Ecopetrol (Colombia), Gulf Keystone (Iraq-KRI), Medco Energi (Indonesia) are notable outperformers. See the charts below.

Apart from the oil price increase, we highlight the following context for this preliminary OPEC+ meeting (the meeting involves a subset of the OPEC+ group, the Joint Ministerial Monitoring Committee which reviews the implementation of supply restraint and is intended to prepare the ground for the full meeting on 17-18 April).

Positive oil price:

  • OPEC+ is in the middle of a 1.2m bpd supply cut (this is supposed to last throughout 1H 19);
  • Modestly better global growth expectations following partial progress in US-China trade negotiations (although concerns persist on both US and China growth);
  • Venezuela security deterioration and a new round of US sanctions (partly offset by new Russian agreements);
  • Saudi public signals on its commitment to ongoing production restraint;
  • US government forecast cut for domestic oil output and data showing a drop in US crude inventories;
Read Also:  Investment Opportunity in FGN Sovereign Ijarah Sukuk

Negative oil price:

  • Iran oil sanction exemptions have been granted by the US to a greater degree than perhaps initially expected (although these are due to expire in May);
  • Saudi has arguably shouldered a proportionately greater burden of supply restraint than Russia (which may portend differing levels of commitment to restraint in the medium-term).
- Advertisement -

Note that we do not make an oil price forecast (effectively, we assume that spot is the best guide to future price)

Oil-related equity performance in small Emerging Markets

Chart-Oil-Equity

- Advertisement -
Oil winners-losers in small EM: pre-OPEC+, post ytd rallyOil winners-losers in small EM: pre-OPEC+, post ytd rally

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Oil winners-losers in small EM: pre-OPEC+, post ytd rallyOil winners-losers in small EM: pre-OPEC+, post ytd rally

Latest News

Nigeria H2’20 Outlook – The viral shock

The year 2020 has been a struggle. A global pandemic is in full swing and is poised to upend...

BUA Group to set up 3 million Metric-ton Cement Company, 50MW Power Plant in Adamawa

The Bua Group announced that it is set to establish a three million metric tonnes cement plant and 50 megawatts power plant in Guyuk...

Economic Slowdown – Quick Response But No Quick Fix (LBS Executive Breakfast Session – July 2020)

Nigerian manufacturers are mostly anxious about two things today: How long will the pandemic lockdown continue before demand for my products recover? (X) - Unknown When will...

Equities Market: Lagos Bourse Plunges by 1.98% amid Sell-Offs

In the just concluded week, the domestic equities market closed in red amid renewed selloffs as investors took profit on stocks such as GLAXOSMITH,...

Naira Gains Against USD at I&E FXW Despite Dwindling External Reserves

In the just concluded week, Naira appreciated against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.09% to close at...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -Oil winners-losers in small EM: pre-OPEC+, post ytd rallyOil winners-losers in small EM: pre-OPEC+, post ytd rally