Economy

Oil Prices Rise as Gulf States Cut Supply By 1.18mbpd

Published

5 years ago

13/05/2020

By Adedapo Adesanya

Crude oil futures pulled a positive outcome on Tuesday as the market reacted well to additional cut from Gulf countries; Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, which agreed to reduce supply by 1.18 million in June.

Brent crude futures climbed 27 cents or 0.91 percent to settle at $29.90 per barrel after falling 4.3 percent on Monday.

The United States’ West Texas Intermediate (WTI) crude futures climbed $1.57 or 6.5 percent to settle at $25.71 per barrel.

On Monday, the world’s top oil exporter and de-facto leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia, said it would cut oil production by an additional 1 million barrels per day in June, different from its earlier agreement in April 2020.

Under the deal which started this month, Saudi Arabia pledged to cut its oil production to 8.5 million barrels per day. With the additional voluntary reduction in June, the Saudis would produce 7.492 million barrel per day next month.

This announcement could, however, not hold the market which was overpowered by fears of a second wave of COVID-19 infections with relaxed lockdowns in place.

Apart from Saudi, the United Arab Emirates (UAE) also pledged to cut even more oil production in June, and so did Kuwait.

UAE Minister of Energy and Industry, Mr Suhail bin Mohammed Faraj Faris Al Mazrouei, announced that the country will increase cut by another 100,000 bpd next month, after already reducing its oil production under the same deal.

Kuwait announced that it would cut its oil production even more than the OPEC+ agreement called for by an additional 80,000 barrels per day in June.

Inventory data this week will be key to extending the recent rally in oil prices, analysts said.

According to available projections, crude inventories likely rose by about 4.3 million barrels in the week to May 8, but this will be confirmed by the American Petroleum Institute (API) industry group on Wednesday and the US Energy Information Administration (EIA) later on Wednesday.

Even with this, the problem of oversupply and storage problems still persists, although not as high as previously, waiting to worry any good news the market might have in the near future.

In some critical locations, such as India and South Korea, storage has already been strained to its limits. Also, space at the US crude hub in Cushing, Oklahoma, became so scare that crude prices briefly dropped below zero last month for the first time on record.

However, the accumulation of oil inventories around the world is slowing down and with additional cuts and return to normalcy, the gap between demand and supply will begin to tighten up.

Economy

Nigeria Adds 150,000 b/d Crude Production in November 2024

Published

1 hour ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.

According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.

In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.

Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.

Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.

OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.

The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.

According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.

“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.

“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.

In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.

Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.

For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.

On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.

Economy

Afriland Properties, Geo-Fluids Shrink OTC Securities Exchange by 0.06%

Published

9 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.

The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.

Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.

At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.

The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.

When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.

Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.

Economy

Naira Weakens to N1,547/$1 at Official Market, N1,670/$1 at Black Market

Published

9 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.

It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.

The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.

At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.

As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.

A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.

The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.

The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.

The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.

Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.