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Crude oil prices on verge of a breakout?

​We shift focus to the commodity section of our core strategy document – the Nigeria Strategy Report. In today’s piece we review developments in the global crude oil market over H2 16 and delineate our outlook for 2017.

Crude oil prices have had some sharp swings over 2016, but the trend since hitting multi-year lows in January has been northward as talk of market rebalancing by conventional oil producers gained ground. On the heels of a bull run in H1 16 (+33% to $49.68/bbl), Brent crude started off H2 16 on a bearish note in July (-14.5% MoM to $42.46/bbl) as talk of an output freeze ahead of OPEC’s April 2016 meeting which fueled the rally in H1 16 waned. However, reflecting production shut-ins in Canada and Nigeria as well as speculation regarding OPEC production cut which was eventually agreed in November, crude oil prices rose 13% over H2 16 to $56.82/bbl, nudging 2016 gains to 52.4%. Nonetheless, on account of the collapse in January, average 2016 crude oil price of $45/bbl is 15% lower relative to 2015.

Provider
ARM Securities Limited
ARM Securities Limited

ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape. ​

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