Nigerian currency exchanges mix with I&E, P2P, parallel market
By Adedapo Adesanya
Oil prices fell about 2% on Thursday as China adhered to its zero COVID policy, while a rise in U.S. interest rates pushed the dollar higher.
Brent crude futures fell $1.49 or 1.5% to $94.67 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.83 or 2.0% to settle at $88.17 a barrel.
In China, COVID-19 cases have reached their highest level in two and a half months. The world’s biggest oil importer stuck to its strict lockdown policy, dampening investor hopes for an easing of restrictions.
The country reported 3,200 local cases of COVID-19 on Thursday, the first count above 3,000 since August 17.
The impact of restrictions continued to affect China’s economy as a survey showed services activity contracted further in October due to the impact of COVID restrictions on business and consumption.
The Caixin index of services purchasing managers fell to 48.4, the lowest since May, from 49.3 in September.
Hopes that last month’s congress of the ruling Communist Party, which will last two decades, would mark a milestone after which China could lay the groundwork to begin returning to zero-COVID were dashed when Xi Jinping, who secured a third term in office, reiterated the validity of the approach.
Prices also came under pressure as the Federal Reserve hiked interest rates by 75 basis points, and central bank chief Jerome Powell said it was premature to consider pausing hikes. rate.
That sent the U.S. dollar higher on Thursday, with Powell indicating that U.S. rates should peak above current investor expectations.
A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.
The Bank of England also raised interest rates to the maximum since 1989 and warned that Britain could face a long recession.
However, the losses were limited by expectations that the market will tighten in the coming months.
The European Union (EU) embargo on Russian oil following its invasion of Ukraine is due to begin on December 5 and will be followed by a halt in imports of petroleum products in February.
Additionally, the expected drop in production from the Organization of the Petroleum Exporting Countries (OPEC) also supported prices.