A Review of the Nigerian Energy Industry

Financial market update

29 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – Nigeria plans to boost crude exports in January to the most in four months after 14% of December shipments were deferred, loading programs obtained by Bloomberg revealed. The country will export 75 cargoes in January totaling 66.8 million barrels or 2.16 million barrels per day. Nigeria raised its December official selling price for benchmark Bonny Light ad Qua Iboe crude to the highest level in six months. The two grades was set at $1.90 per barrel more to Dated Brent.

USA – As the US economy slows delinquency on student loans surpassed credit cards last quarter to show the highest rate among consumer debt. Payments on 11% of educational loans were at least 90 days behind last quarter with delinquency on credit card debt ranking second at 10.5%.

China – Moody’s investor services has changed its outlook for China’s property industry to stable from negative on the expectation that the trend of improved sales and access to funding will continue in 2013. The agency expects property sales to grow in the single digits in percentage terms over the next 12 months. Easing mortgage financing for first time home buyers, increasing development of mass market products, solid underlying demand and continuing urbanization is expected to drive sales.

Japan – Retail sales fell in October by the most in 11 months as consumers purchased fewer cars and televisions adding pressure on the government to stimulate the economy. Sales fell 1.2% from a year earlier following a 0.4% advance in September. With elections scheduled for Dec. 16, candidates from the two largest parties have said they will implement additional spending to rekindle expansion after exports fell for a fifth month in October and wages stagnated.

Europe – Angela Merkel’s upcoming re-election battle is shaping Europe’s response to bailing out debt ridden Greece. It is believed that the greatest risk to her re-election bid is a dramatic worsening of Europe’s debt crisis – such as Greece existing the eurozone or a Greek debt write off costing billions in German taxpayer money

WDAS – CBN offered and sold $200mio and maintained the marginal rate at 157.3176 [inc. the 1% commission] for the 3rd consecutive auction.

Indicative Currency Exchange Rates
                             Bid             Offer
EURUSD           1.2948           1.2958
GBPUSD            1.6013           1.6023
USDJPY             82.13             82.53
USDCHF            0.9297          0.9317
GBPEUR            1.2367           1.2377
USDZAR            8.8235          8.9235
USDNGN           157.45           157.95
JPYNGN            1.9171            1.9671
CHFNGN           169.36           173.36
EURNGN           203.87          207.87
GBPNGN            252.12           256.12
ZARNGN             17.84            19.84

Oil fell even more after unexpected declining stockpiles and optimism that a US budget agreement can be reached. WTI rose $0.23 to $86.72/bbl, while Brent settled at $109.51/bbl (-$0.36), with the WTI-Brent benchmark premium at $23.02 yesterday.

Interest rates
NIBOR (%)                       LIBOR (%)
O/N              11.4583           USD 1 month            0.2090
7 Day            11.9167            USD 2 month           0.2570
30 Day         13.2917            USD 3 month           0.3105
60 Day         13.7500           USD 6 month           0.5280
90 Day         14.2083           USD 12 month         0.8600
Y/Y Consumer Inflation October 2012 :                11.70%
FX Reserves: 21 November 2012 (USD bn)          43.88
MPR                                                                               12.00%

Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria

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