Crude oil prices rise amid demand recovery, supply worries

Weekly Economic Indicators released by the Central Bank of Sri Lanka (CBSL) for 1 – 7 January 2022 show crude oil prices taking an upward trend.

“During the period under review prices increased mainly due to hopes on further demand recovery in 2022. Decision of OPEC+ countries to adhere to their planned increase for February 2022, escalating unrest in Kazakhstan and supply outages in Libya also supported the price increases. Overall, both Brent and WTI prices increased by US dollars 4.40 and US dollars 4.45 per barrel, respectively, during the period,” the CBSL said.

With regard to the Monetary Sector, the CBSL said that weekly AWPR for the week ending 07th January 2022 decreased by 68 bps to 7.93 per cent compared to the previous week.

It said that reserve money increased compared to the previous week mainly due to the increase in currency in circulation and increase in deposits held by the commercial banks with the Central Bank.

“The total outstanding market liquidity was a deficit of Rs. 424.448 bn by end of this week, compared to a deficit of Rs. 466.248 bn by the end of last week,” CBSL noted.

“By 07th January 2022, the All Share Price Index (ASPI) increased by 8.63 per cent to 13,280.94 points and the S&P SL 20 Index increased by 7.60 per cent to 4,554.99 points, compared to the index values of last week,” the Bank said.

As regards the External Sector, the CBSL said that during the year up to 07th January 2022, the Sri Lankan rupee depreciated against the US dollar by 0.4 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee appreciated against the Japanese yen by 0.3 per cent while depreciating against the pound sterling by 0.8 per cent, the Indian rupee by 0.4 per cent and the Euro by 0.3 per cent during this period.