Business
Oil Sheds Gains As Global Supply Concerns Linger
Oil gave up most of its
early gains to trade around 40 dollars per barrel as persistent oversupply concerns offset a surprise fall in U.S. crude inventories after 10 weekly rises.
Brent futures were down more than six per cent this week and having dipped below 40 dollars per barrel.
There are renewed expectations it might test 2008’s low around 36 dollars.
Brent futures were up 12 cents 40.23 dollars per barrel having traded as high as 40.70 dollars.
West Texas Intermediate (WTI) U.S. crude futures were down 11 cents at 37.05 dollars per barrel, erasing early gains.
WTI is down nearly 13 per cent this month.
Crude inventories fell 3.6 million barrels in the week to Dec. 4, compared with analysts’ expectations for an increase of 252,000 barrels, U.S. Energy Information Administration (EIA) data showed.
While this gave a slight boost last Wednesday and in early trading in Europe and Asia, bearish investors once again came to the fore in early U.S. trading hours.
“It will take quite a serious catalyst to end the bearishness,” said Richard Mallinson, geopolitical analyst at Energy Aspects.
The Organisation of Petroleum Exporting Countries (OPEC) last week failed to reach an agreement on production quotas, leading to fears that increased production from Iran and elsewhere would increase the glut further.
“OPEC showed last week it’s a paper tiger in that it won’t do anything to prevent supply growth,” said Michael Hewson, chief market strategist at CMC Markets.
OPEC forecast recently that oil supply from non-member countries would fall more sharply next year, a development that would suggest its strategy of defending market share is working.
Oil has traded in a tight range close to 40 dollars per barrel since Monday when it fell to its lowest since 2009.
Hewson said that in thin liquidity up to year-end there is a good chance Brent will fall below its low since 2008 at around 38 dollars per barrel.
Still, there were signs of more demand from China, the world’s second-biggest oil user.
Vehicle sales were up 20 per cent in November from a year earlier to 2.5 million vehicles, the China Association of Automobile Manufacturers said.
However, there was also fresh evidence of market oversupply.
The EIA data showed that U.S. distillate stockpiles rose by five million barrels, twice the expected increase and the sharpest increase since January.
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
