Economy

Brent Sheds Over 2% as Oil Market Faces Oversupply

Published

5 years ago

23/01/2020

By Adedapo Adesanya

Brent crude dropped to $63 per barrel on Wednesday, extending losses as the International Energy Agency (IEA) revealed that the market will have an oversupply by 1 million barrels per day (bpd) in the first half of this year.

This led to a bearish performance for the Brent crude, which had dropped over $5 in the last week, as it dropped 2.14 percent equivalent to $1.38 to trade at $63.21 per barrel.

Also, the US West Texas Intermediate (WTI) crude further moved down below $57 as it shed 1.27 percent or 72 cents to trade at $56.02 per barrel. This performance was the lowest settlement for a front-month contract since December 3, 2019.

Speaking on the sidelines of the World Economic Forum (WEF) annual meeting in Davos, Switzerland, the Executive Director of the IEA, Mr Fatih Birol said the market is expecting a surplus due to recent developments.

“An abundance of energy supply in terms of oil and gas. It’s the reason that recent incidents we have seen — with the Iranian general, Qassem Soleimani, killed, Libya unrest — didn’t boost international oil prices,” he said.

The agency said this will be due to increase in US shale output, which he said will continue to influence other energy producers, including members of the Organization of the Petroleum Exporting Countries (OPEC) who had in December extended the cut to oil production by 1.7 million barrels per day as forecast show a monthly rise in US shale oil production of 22,000 barrels a day to 9.2 million barrels a day in February.

Meanwhile, China’s coronavirus is expected to further affect oil prices as the number of new cases has risen sharply in China, with 440 confirmed cases and if this leads to travel restrictions, it could affect demand for crude, directly telling on prices. Market analysts believe that if the virus develops dramatically and hit travel and growth, demand for oil could fall by 260,000 per day.

On the Libyan front, the National Oil Corporation (NOC) declared force majeure on the loading of oil from two major oilfields after the latest development in a long-running military conflict as this could help cut losses and support the commodity.

Unless oil facilities return to operation quickly, Libya’s crude output will be reduced to about 72,000 bpd from about 1.2 million barrels per day.

Industry data from the American Petroleum Institute (API) and the Energy Information Administration (EIA) are expected on Thursday with forecast report a rise of 500,000 barrels in US crude supplies for the week ended January 17, and this is not a good outlook as rise in inventories usually affect prices.

Economy

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

Published

2 hours 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

10 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.