The naira recorded a mixed performance across market segments last week, reflecting continued pressure from declining oil inflows and a fragile foreign exchange (FX) liquidity environment.
In the parallel market, the naira appreciated marginally by 0.06% week-on-week to close at N1,544.00 to the US dollar. Conversely, it weakened slightly at the Nigerian Autonomous Foreign Exchange Market (NAFEM), depreciating by 0.14% to settle at N1,532.34 per dollar by the end of the week.
This disparity underscores persistent supply-demand imbalances in the FX market, particularly as Nigeria’s oil receipts continue to fall short of expectations, until recently.
On the global oil scene, crude prices dipped over the week. Brent crude, the international benchmark, closed at $69.39 per barrel on Friday, down from $70.01 the previous week.
Similarly, US West Texas Intermediate (WTI) fell to $66.83 per barrel from $67.56. While prices rebounded slightly on Friday due to fresh supply concerns sparked by drone strikes in northern Iraq and new EU sanctions on Russia, the broader trend for the week was mildly bearish.
The downturn poses a significant risk to Nigeria’s fiscal outlook, as the N54.99 trillion 2025 national budget is premised on an oil price benchmark of $75 per barrel and a production target of 2.06 million barrels per day.
However, first-half performance has underwhelmed, with average crude prices at $72 per barrel and output consistently below the target.
Despite this, Nigeria’s Bonny Light crude rose modestly by 0.31% to $74.38 per barrel, buoyed by a rebound in global demand. This helped bolster external reserves, which climbed by $420 million to $37.85 billion from $37.43 billion.
The increase reflects continued momentum in reserve accretion, driven by improved oil earnings and reduced FX interventions by the Central Bank of Nigeria (CBN).
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), average daily crude oil production (excluding condensates) rose by 3.6% to 1.51 million barrels per day in June from 1.45 million barrels in May.
This marks the first time in five months that Nigeria has met its OPEC quota, a development credited to enhanced operational efficiency and improved security in key producing regions.
Looking ahead, analysts anticipate further appreciation of the naira, supported by stronger oil production, rising prices, and steady capital inflows.
These factors are expected to reinforce FX market stability in the near term and sustain the current trajectory of reserve growth.
