The dip of crude oil below the $74.

98 level seems to have dampened the growth

prospects of oil-producing countries. The Russian Ruble and Nigerian Naira, by way
of example, have suffered losses against the U.S. Dollar signaling, perhaps, that the
emerging market boom is quickly turning into a bust.
While soaring oil prices catalyzed boom times in Nigeria, hapless consumers on the
east end of the African continent, namely Kenya had to dig deep for their daily
upkeep. The Abuja-Nairobi Arbitrage is a phrase I have conjured to refer to the seesaw of fortunes between the two regions based on black gold. Kenyan consumers
are now cautiously optimistic that the trend of crude will translate into reduced cost
of living. However, a weakening Kenyan Shilling may serve as a dampener on these
hopes.
The Nigerian Finance Minister was reported as urging financial players not to panic
in the wake of last weeks hammering of the Naira. Forex players can smell blood in
the water. Nigeria is heavily dependent on crude oil which funds 70% of its budget.
The Nairas depreciation is right on time.
Below is the quarterly chart of NYMEX crude oil with projection lines from the 1998
low:

Technical support lies at $68.96 and $45.59 while technical resistance lies at $96.14
and $103.77. 2011 was the highest annual closing at $98.89 suggesting that we
could see a turning point in 2014 (depending on the annual close) or 2016.

Kinuthia Karanja,
karanjakinuthia@hotmail.com
http://investorslounge.tumblr.com/