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Economy

Crude Oil Slides on US Output Rise, Weak Chinese Demand

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crude oil market

By Adedapo Adesanya

Prices of the crude oil grades fell on Monday after United States production rose amid weaker economic data out of China, with the Brent dropping 94 cents or 0.98 per cent to sell at $94.83 a barrel and the West Texas Intermediate (WTI) crude declining by $1.37 or 1.6 per cent to $86.53 a barrel.

Oil output in the United States climbed to nearly 12 million barrels per day in August, the highest since the onset of the COVID-19 pandemic, monthly government data showed.

Overall US output peaked at 13 million bpd in late 2019 and has not returned to that level since the pandemic started as rigs have been shut in and as costs for equipment and labour increased rapidly.

Moves by President Joe Biden on oil and gas companies, including investing some of their record profits in lowering costs for American families, also weakened prices.

It was reported that he would call on Congress to consider requiring oil companies to pay tax penalties and face other restrictions, the official said. The President has previously pushed oil companies to raise production rather than use profits for share buybacks and dividends.

The administration has also relied on releasing supplies from the Strategic Petroleum Reserves (SPR) to ease a supply crunch. About 1.9 million barrels were released from the SPR last week as part of the government’s plan to release 180 million barrels.

Meanwhile, factory activity in China, the world’s largest crude importer, fell unexpectedly in October, weighed down by softening global demand and strict COVID-19 restrictions that hit production.

Strict COVID-19 curbs in China have hit economic and business activity, curtailing oil demand. China’s crude oil imports for the first three quarters of the year fell 4.3 per cent yearly for the first annual decline since at least 2014.

The Organisation of the Petroleum Exporting Countries (OPEC) on Monday raised its forecast for medium and long-term oil demand and said $12.1 trillion of investment is needed to meet this demand despite the energy transition.

In its report, the group said world oil demand will reach 103 million barrels per day in 2023, up 2.7 million bpd from 2022. The 2023 total demand is up 1.4 million bpd from last year’s prediction.

OPEC also raised its demand forecasts for the medium term to 2027, saying the figure is up by almost 2 million bpd by the end of the period from last year.

Still, the cartel is upbeat about its later prospects, seeing its market share rising. US tight crude supply is seen peaking after the late 2020s, rather than around 2030 last year.

“Oil is expected to remain the number one fuel in the global primary energy mix,” the report said.

The group is expected to hold its next meeting in Vienna on December 4, one day before an agreement by the Group of Seven countries to cap Russian oil sales at an enforced low price is due to go into effect.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Economy

CitiTrust Holdings Sells Commercial Paper for 22%

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Cititrust Financial Services Ikechukwu Peter

By Aduragbemi Omiyale

An opportunity has opened for commercial paper investors as CitiTrust Holdings Plc is offering the asset class at a coupon of 22.0 per cent per annum under its N50 billion commercial paper issuance programme.

According to details of the exercise obtained by Business Post, the company, in the financial services sector, is selling the debt instrument in four tenors of 90 days, 120 days, 180 days and 270 days.

The minimum subscription for prospective and potential investors is N5 million and can be purchased through any of the registered stockbrokers.

The 90-day instrument is going for 16.1 per cent, the 120-day paper is being sold for 17.5 per cent, the 180-day note is 19.1 per cent, and the 270-day instrument is going for 22.0 per cent.

The offer commenced on November 23, 2022, and is expected to close on Wednesday, December 7, 2022, with the net proceeds to be used for the company’s general corporate purposes and working capital.

CitiTrust said investors would be paid their interests from the operating cash flows of the organisation, with purchases to be settled via direct debit, electronic funds transfers, NIBBS Instant Payment (NIP), NIBBS Electronic Funds Transfer (NEFT) or Real-Time Gross Settlement (RTGS).

CitiTrust is a leading pan-African financial and investment conglomerate owned by reputable institutional and private investors. The company has a focus on high-end financial products and services for its targeted sectors of the economy, with operations in commercial banking, investment banking, wealth management, pension management, insurance and alternative investment.

The firm is a foremost financial solutions provider and has been an intricate part of the Nigerian economy since 2007. It has grown and evolved over the years into an award-winning market leader in the financial sub-sector of the Nigerian economy, establishing its footprints in 12 African countries: Nigeria, Ghana, Rwanda, Botswana, Liberia, Benin Republic, Malawi, Kenya, Tanzania, Uganda, Cote d’Ivoire, South Africa and the UK.

In 2019, the organisation upgraded its operations into a reputable financial services provider to align with the strategic vision of its shareholders to build an enduring institution that delivers cross-functional services to its clientele.

The company’s deep knowledge of the market, dexterity, smooth and reliable processes driven largely by technology and the high quality of its personnel puts it on the cutting edge of strategic Importance with its clientele.

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Economy

No Individual Should Operate Domiciliary Account in Nigeria—Tope Fasua

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domiciliary account in Nigeria

By Modupe Gbadeyanka

An economist and former presidential candidate of the Abundant Nigeria Renewal Party (ANRP) in the 2019 general elections, Mr Tope Fasua, has kicked against the opening of a domiciliary account in Nigeria for an individual, calling it an abnormality.

Speaking on a Channels Television’s Saturday breakfast show, he said only corporate organisations involved in international trades should be allowed to operate a dorm account.

As individuals who need foreign exchange to transact any business transaction, they should be given a credit card or prepaid card, which would be loaded with the value of Dollars they require instead of giving them cash.

According to him, this would limit the demand for FX and strengthen the Naira in the forex market segments.

Mr Fasua made these submissions while reacting to the decision of the Central Bank of Nigeria (CBN) to redesign the N200, N500, and N1,000 notes.

“Personal dorm accounts are mostly unnecessary; only companies that are doing international trade transactions or financial market companies should be able to hold dorm accounts because they have a reason to,” the renowned analyst said on the programme monitored by Business Post.

“When I travelled abroad recently, GTBank loaded by card with Dollars, and when I need to spend where I am going, I just use my card,” he added, stressing that, “If you are an exporter, you have export proceeds coming in, you can have a dorm account.

“If you are an importer and you need to pay your customer once in a while, you can have a dorm account as a company, but if every Tom, Dick and Harry can speculate against their own currency, you will never get it out of crises.”

According to him, “The ease at which people move against their currency in this country is too much; it should not be that easy.”

Tope Fasua

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Economy

LIBIZFAIR Will Boost Business Opportunities in Lagos

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business opportunities

By Modupe Gbadeyanka

The Chairman of Nigeria in Diaspora Commission (NiDCOM), Mrs Abike Dabiri-Erewa, has disclosed that the Lagos Island Business Fair (LIBIZFAIR) will improve business opportunities in the state and also attract more investments.

The former federal lawmaker said this at the opening ceremony of the fair organised by the Lagos Island Connect, in conjunction with the Lagos State Ministry of Commerce, Industry and Cooperatives.

At the programme held at the Tafawa Balewa Square (TBS), Onikan, Lagos, Mrs Dabiri-Erewa, represented by the Head of the Lagos Annex of the agency, Mr Oladipo Odebowale, commended the state government for the initiative.

She noted that the platform provides a unique opportunity for entrepreneurs to showcase their businesses, saying, “This will boost investment and business opportunities in the state.”

The Commissioner for Commerce, Industry and Cooperatives, Mrs Lola Akande, in her remarks, described the empowerment of Micro, Small and Medium Enterprises (MSMEs) as critical to the empowerment of youths.

Represented by the Permanent Secretary in the minister, Mrs Adetutu Ososanya, she noted that building the capacity of youth-oriented enterprises, with the goal of providing opportunities for growth, will lead to an increase in prosperity among Lagos Island youths.

“I believe this platform can leverage socio-economic networking and Information Communication & Technology to provide more interactive opportunities for the teeming youth of Lagos Island and its environs from diverse cultural, religious, social and educational backgrounds to grow their businesses and services, as well as the State’s economy,” she said.

The Commissioner explained that the fair aligns with the policy of Governor Babajide Sanwo-Olu of creating a conducive environment for businesses to thrive, widening access to the market and encouraging networking and collaboration among entrepreneurs.

Also speaking at the event, the Special Adviser to the governor on Sustainable Development Goals & Investment (SDG&I), Mrs Solape Hammond, stressed that the programme was geared towards supporting businesses to thrive at the local government level.

“The study discovered that the youths of Lagos Island are versatile, technologically enabled, driven and willing to be positively engaged, particularly in personal and communal development.

“Though most of them are faced with different challenges yet, there is an enormous zeal to be gainfully engaged rather than being idle, which could contribute to community nuisance.

“Young people in Lagos Island have a brighter vision for the future, and all stakeholders must join together to support them to deliver it,” the governor’s aide said in her presentation on the Lagos Island Youth Needs Assessment Survey.

The co-founder of the Lagos Island Connect, Mrs Yemisi Ransome-Kuti, while addressing participants, noted that the LIBIZFAIR 2022 was geared towards taking businesses in Lagos Island from a local to a global level by investing in the youths and preventing their massive migration to foreign lands.

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