Economy
Barclays Raises Brent Crude Price Forecasts by $11
By Adedapo Adesanya
British financial institution, Barclays, on Monday raised its Brent crude price forecasts by $11 to $111 per barrel for 2022, citing a larger and sustained disruption in Russian supply following sanctions by the European Union (EU).
It also increased the price benchmark for the year 2023 by $23 per barrel as it sees Brent prices averaging $111 this year and next, while it sees US West Texas Intermediate (WTI) at $108 for the same period.
Russian oil output is expected to decline by 1.5 million barrels per day by the end of the year, Barclays said, adding it no longer expects inventories to normalise over the forecast period.
“Limited spare capacity and constrained U.S. supply growth, mean inventories are likely to remain tight over our forecast horizon, barring a significant slowdown in demand due to spillover effects,” the bank said in a note.
Business Post had reported that the leaders of the EU last week agreed to cut oil imports from Russia by 90 per cent by the end of the year.
The sanctions will also bar operators within the EU from financing or insuring transportation of Russian oil to third-party countries.
“This will make it particularly difficult for Russia to continue exporting its crude oil and petroleum products to the rest of the world since EU operators are important providers of such services,” the European Council said in a statement.
European Council President Ursula von der Leyen proposed the ban in May after the US, which is less reliant on Russian oil, had announced a similar embargo.
Europe is the destination for nearly half of Russia’s crude and petroleum product exports before Russia’s invasion of Ukraine, according to the International Energy Agency (IEA).
Citi Research on Monday also raised its quarterly oil price forecasts for this year and its year-average outlook for 2023, noting any additional supply from Iran looked heavily delayed.
Citing tighter market balances, Citi raised its second-quarter 2022 Brent price forecast by $14 to $113 per barrel, and the third and fourth quarter prices by $12, to $99 and $85, respectively.
The bank estimates Brent to average $75 per barrel in 2023, revised higher by $16.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited reversed the gains of the previous trading session to plunge by 0.35 per cent on Wednesday.
This was triggered by profit-taking from investors who chew on the 0.25 per cent interest rate hike by the Central Bank of Nigeria (CBN) on Tuesday. The Monetary Policy Rate (MPR) is currently at 27.50 per cent and the inflation for October stands at 33.88 per cent.
Business Post reports that the selling pressure was visible seen in the consumer goods sector, which went down by 0.34 per cent yesterday, erasing the gains recorded by the others.
The insurance index appreciated by 1.24 per cent, the energy counter improved by 1.02 per cent, the banking space jumped by 0.14 per cent, and the industrial goods sector gained 0.02 per cent.
At the close of business, the All-Share Index (ASI) contracted by 348.31 points to 97,296.57 points from 97,639.88 points and the market capitalisation declined by N208 billion to N58.970 trillion from N59.178 trillion.
Investor sentiment was weak at midweek after Customs Street ended with 23 price gainers and 26 price losers, representing a negative market breadth index.
John Holt lost 10.00 per cent to finish at N9.90, Aradel Holdings declined by 9.98 per cent to N473.30, Eterna slumped by 9.88 per cent to N22.35, Haldane McCall shed 8.43 per cent to N5.65, and UPDC crumbled by 8.13 per cent to N1.47.
On the flip side, Sunu Assurances gained 9.97 per cent to trade at N4.19, Guinea Insurance grew by 8.16 per cent to 53 Kobo, Conoil rose by 6.56 per cent to N276.00, DAAR Communications expanded by 6.56 per cent to 65 Kobo, and NASCON improved by 6.23 per cent to N32.40.
A total of 822.5 million equities valued at N10.3 billion were traded in 9,385 deals on Wednesday compared with the 552.1 million equities worth N8.0 billion transacted in 9,305 deals on Tuesday, indicating an increase in the trading volume, value, and number of deals by 48.98 per cent, 28.75 per cent, and 0.86 per cent, respectively.
The most active stock for the session was Haldane McCall, which sold 373.7 million units for N2.2 billion, Japaul transacted 115.9 million units worth N285.5 million, Tantalizers traded 30.7 million units valued at N34.9 million, UBA exchanged 29.4 million units worth N930.1 million, and GTCO transacted 28.8 million units valued at N1.5 billion.
By Modupe Gbadeyanka
The Dangote Refinery located in the Lekki area of Lagos State has been described as a game-changer for Nigeria’s economy because of its significance to the country’s sustainable growth.
This was the view of the Ogun State Chamber of Commerce, Industry, Mines, and Agriculture (OGUNCCIMA) through its president, Mr Niyi Oshiyemi.
“The Dangote Refinery is a game-changer for Nigeria’s economy. With a capacity to refine 650,000 barrels of crude oil daily, it has reduced Nigeria’s reliance on imported petroleum products, conserved foreign exchange, and fortified our energy security.
“This milestone reinforces the critical role the private sector plays in national development,” Mr Oshinyemi said, noting that, “The refinery’s operations have created employment for Nigerians at all levels while fostering technology transfer and skills acquisition. This has strengthened local businesses and equipped them with the tools to compete in domestic and global markets.”
The emphasis on local content has been a cornerstone of Dangote Refinery’s strategy. By sourcing materials locally and partnering with indigenous companies, the refinery has supported the growth of Nigerian enterprises and encouraged investments in infrastructure, engineering, and technology.
The ripple effects of the Dangote Refinery extend beyond the energy sector. Its presence has catalyzed industrialization by attracting investments in related sectors such as petrochemicals, manufacturing, and transportation. This multiplier effect has significantly expanded Nigeria’s industrial base and enhanced the nation’s economic competitiveness.
“This refinery is a shining example of what can be achieved through visionary leadership and investment in strategic sectors. It demonstrates Africa’s potential to compete globally and foster regional integration,” Mr Oshiyemi remarked.
In addition to its economic contributions, Dangote Refinery has maintained a strong commitment to corporate social responsibility. The Dangote Group’s investments in education, healthcare, and infrastructure have improved the quality of life for many Nigerians and strengthened community resilience.
“Dangote Refinery exemplifies the role of private sector enterprises in driving social progress alongside economic development. Its initiatives in healthcare and education are building a brighter future for Nigerians,” the OGUNCCIMA chief noted.
He urged stakeholders across public and private sectors to emulate the Dangote Refinery’s innovative approach to development. By fostering partnerships and investing in transformative projects, Nigeria can achieve sustainable economic growth and reduce its reliance on external resources.
“This refinery stands as a model for what is possible when the private sector leads with vision and commitment. We call on all stakeholders to collaborate and replicate such success stories to build a resilient, self-reliant, and prosperous Nigeria,” Mr Oshiyemi concluded.
By Adedapo Adesanya
The House of Representatives on Wednesday passed the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the next three years (2025-2027).
In passing the MTEF, the lower chamber’s committees on Finance, Petroleum Upstream, and Petroleum Downstream were tasked to investigate reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission (RMAFC) alleging that the Nigerian National Petroleum Company (NNPC) Limited’s withheld N8.48 trillion as claimed subsidies for petrol.
Additionally, the investigation will address the Nigeria Extractive Industries Transparency Initiative (NEITI) report that claimed the NNPC failed to remit $2 billion (N3.6 trillion) in taxes to the federal government.
The committees were further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by the NNPC between 2020 and 2023.
Some of the recommendations in the MTEF as adopted by the house are; that the projected oil benchmark prices are $75, $76.2 and $75.3 per barrel in 2025, 2026 and 2027, respectively.
Three-year projections for domestic crude oil production are 2.06 million barrels per day, 2.10 million barrels per day and 2.35 million barrels per day for the subsequent years of 2025, 2026 and 2027.
The country’s economic growth rate forecast, measured by the gross domestic product (GDP) was put at 4.6 per cent, 4.4 per cent and 5.5 per cent for the years 2025, 2026 and 2027, respectively.
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