OPEC weekly basket price decreased marginally from $45.95 on June 24, 2016 to $45.26 on July 1, 2016,while Nigerias bonny light fell by $1, from $48.90 to $47.91. The apparent decline in crude oil price was driven by lingering market demand uncertainty, following the unexpected Brexit referendum. More so, ease in supply disruptions in Nigeria and Canada may have contributed to the downward pressure on prices. Going forward, until there is greater regulatory precision on global oil output levels, prices may likely remain stuck or continue to exhibit a downward trend. Although, Nigerias fiscal constraints slightly relaxed with oil production increasing in the review week (following repairs on sabotaged pipeline channels), potential global crude oil oversupply threatens governments revenues. However, oversupply threats could be reduced if there is a consensus on oil production quotas in the upcoming OPEC meeting.

OPEC weekly basket price increased marginally from $45.09 on June 17, 2016 to $45.95 on June 24, 2016, while Nigerias bonny light increased from $47.61 to $48.90 (with a peak of $49.2 on June 23, 2016)within the same period. The rise in oil price, amidst downward pressures, was likely driven by expectations that the UK would remain in the EU. However, price fell (to $47.61) on June 24, 2016 following the outcome of the UK referendum (on June 23, 2016) to leave the EU. This was driven by concerns over a possible contagion effect of further disintegration on the EU (a major oil consumer) which could drive down oil demand in the longer term. In the medium term, oil prices could face further pressure as a result of rising crude oil output and attenuating production disruptions in Canada and Nigeria. Although, the recent rise in oil prices seem transient, Nigeria can benefit from the marginal rise if disruptions in oil production is quickly resolved

The Naira strengthened against the dollar in the review week. Specifically, the Naira appreciated by 2.7 percent to N355/$ (parallel market rate) on June 17, 2016, following the release of the flexible FOREX policy guidelines by the CBN on June 15, 2016. The new policy effectively adopts a single market structure hosted at the autonomous/inter-bank market. The inter-bank trading scheduled to commence on June 20, 2016 will be market-determined, officially eliminating the N197/$ peg. To ensure foreign exchange liquidity, primary market dealers have been introduced while the CBN will participate in the market through periodic interventions.

The All-Share index (ASI) and Market Capitalization both depreciated (week-on-week) by 1.45 percent for the second consecutive trading week- June 3, 2016 to June 10, 20166. ASI depreciated by 401.8 points from 27,634.42 points to 27,232.62 points, while Market Capitalization declined by N140billion from N9.49 trillion closing the week at N9.35 trillion. All other indices declined, with the exception of NSE ASem Index, NSE Insurance Index, and NSE oil/Gas Index. The delay in the implementation of proposed forex policy continues to adversely affect stock market performance. However, with growing speculations that the new FOREX guidelines would be released in the succeeding week, market indices could perform better subsequently. Hence, monetary authorities should ensure the timely release and implementation of the new FOREX policy to boost investors confidence in the near term and ensure price stability in the capital market.

Crude oil price continued to increase in the period under review, reaching its 2016 peak at $50.30 on June 2, 2016. Specifically, OPEC weekly basket price increased by 1.43 percent from $44.65 on May 27, 2016 to $45.29 on June 3, 2016. Brent was sold for $49.96 on June 3, 2016. The present rise in crude oil price can be attributed to oil production shocks in several oil-exporting countries, and the general expectation of a further cut in output following the OPEC meeting in Vienna on June 2, 2016. However, the OPEC meeting ended with no agreement on production quotas. In Nigeria, oil production level increased in the period under review, following repairs on some of the damaged oil and gas facilities. Precisely, Nigerias output increased by 200,000 barrels on June 3, 2016 to 1.6 million barrels.