Fitch Ratings has affirmed Nigeria’s long-term foreign currency Issuer Default Rating (IDR) at ‘B+’ with a negative outlook. While B+ is encouraging as the nation continues to recover, the negative outlook serves to highlight how Nigeria must break away from its reliance on oil. With Fitch expressing concerns over “the sustainability of the economic growth momentum”, the nation must strive to derive growth from other sustainable sources other than rising oil prices.
Crude oil prices were firmly bullish this week despite the Dollar’s aggressive appreciation.
While optimism over rising global demand may have supported oil, price action suggests that the rally remains driven by geopolitical risk factors.
The looming Iran sanctions are likely to fuel speculation of tighter global supply, while heightened geopolitical tensions in the Middle East may spark fears of potential supply disruptions.
Although oil could edge higher in the near term, robust US Shale production has the potential to create some headwinds for bulls down the road.
Taking a look at the technical picture, WTI Crude has scope to challenge $75 if bulls can secure a daily close above $72.
