Economy
Crude Oil Tumbles as US Fed Projects More Hike, Crude Inventory Build
By Adedapo Adesanya
Crude oil fell by 1 per cent on Wednesday after the US Federal Reserve projected more interest rate hikes this year, as government data showed an unexpected, large build in crude oil stocks in the United States.
As a result, $1.05 or 1.5 per cent was trimmed from Brent, as it settled at $73.20 a barrel, while the US West Texas Intermediate (WTI) received a haircut of $1.15, or 1.7 per cent to $68.27.
Both benchmarks had climbed more than 1 per cent earlier in the session. They rose more than 3 per cent the previous day on expectations of rising fuel demand after China’s central bank lowered a short-term lending rate.
The US Federal Reserve kept interest rates unchanged on Wednesday but signalled in new economic projections that borrowing costs will likely rise by another half of a percentage point by the end of this year as the U.S. central bank reacted to a stronger-than-expected economy and a slower decline in inflation.
In an effort to balance risks to the economy with a still unresolved fight to control inflation, “holding the target (interest rate) range steady at this meeting allows the committee to assess additional information and its implications for monetary policy,” the rate-setting Federal Open Market Committee (FOMC) said in a unanimous policy statement issued at the end of its latest two-day meeting.
It was disclosed that further rate increases would “take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” it said.
Higher interest rates strengthen the US Dollar, making commodities denominated in the US currency, like oil, more expensive for holders of other currencies.
The Energy Information Administration (EIA) reported an estimated inventory build of 7.9 million barrels for the week to June 9.
This compared with a modest inventory draw of half a million barrels for the previous week and an estimated build of just over 1 million barrels for the week to June 9 as reported on Tuesday by the American Petroleum Institute (API).
Analyst expectations for the weekly change ranged from a draw of 2.5 million barrels to a build of 2 million barrels.
Meanwhile, the International Energy Agency (IEA) increased its oil demand growth forecast for this year by 200,000 barrels per day to 2.4 million barrels per day, lifting the projected total to 102.3 million barrels per day.
However, the agency expects economic headwinds to reduce growth to 860,000 barrels per day next year and increase the use of electric vehicles to help to reduce that to 400,000 barrels per day in 2028 for overall demand of 105.7 million barrels per day.
The IEA’s 2023 oil demand growth figure is slightly above that of the Organisation of the Petroleum Exporting Countries (OPEC).
JPMorgan downgraded its forecast for this year’s average Brent crude price by $9 to $81 a barrel.
By Aduragbemi Omiyale
Thirty-one companies on Tuesday emerged as winners of the 2025 licensing round of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The energy firms competed to take control of 50 oil and gas blocks put on offer by the Nigerian government.
They were among the 143 companies that submitted 200 bids for the oil facilities drawn from diverse terrains, including the Niger Delta Onshore, Niger Delta Shallow Water, Niger Delta Deep Offshore, Benin Basin Onshore, Anambra Basin Onshore, Chad Basin Onshore and Benue Trough.
Business Post gathered that investors, however, were only interested in 37 out of the 50 oil blocks put up for sale by the NUPRC. This is the first time in Nigeria’s energy history that frontier basins would attract such a level of investor interest.
The organisations that won the bids include SSonic Petroleum Limited (PPL 2A29), CFP Pipeline and Flowlines (2A30), Dutchford E&P Limited (2A32), Attabanson Global Company Limited (2A33 and PPL 901), Rosem Energy Limited (2A38), Pivot-GIS Limited (2A39), Network E&P (2A40), Asharami (2A41), LexOil (2A42), BVOF (2A43), GupscoEnergy Limited (2A44 and 2A51), Saratoga (2A45), Volante (2A46), Concept-Reel Petroleum Services Limited (2A47 and 2A55), Clinton Oil Field (2A48 and 2A62) and Nuway Oaklane Limited (2A49).
Others are Ramec (2A50), Italia (2A53), Blueridge E&P (2A54), Up Energies Limited (2A56), AYM Shafa (2A57), Blackrock Holdings Limited (2A58), Funtay Integrated Business Limited (2A59), Riparian Development and Production Limited (2A60), Nikstallis (2A61 and PPL 900), Stardeep Petroleum (PPL 2010), Dakoda & U Limited (PPL308 and PPL 800), Southborne Oil and Gas Limited (PPL 902), Lanaka Petroleum (PPL 903) HighbanResources Limited (PPL 700), Eyre Energy Limited (PPL 801).
By Adedapo Adesanya
Oil prices rose roughly 2 per cent on Tuesday as investors reacted to mounting concerns that escalating hostilities between the United States and Iran and threats by Yemen’s Houthis to blockade Saudi Arabia could disrupt global energy supplies.
Brent futures rose $1.79 or 2.0 per cent to $91.01 a barrel, while the US West Texas Intermediate (WTI) crude gained $1.68 or 2.0 per cent to settle at $84.91 per barrel.
US forces bombed targets in the south and west of Iran while Iran targeted American sites in Bahrain, Kuwait and Jordan and at least one tanker was hit in the Strait of Hormuz.
Supply concerns resurfaced with the Strait essentially closed again and tanker traffic at multi-month lows, to the level from before the ceasefire between the US and Iran, which appears to be over at the moment.
Prices could go much higher if the renewed conflict drags on for a few more months, as the world has now drained a lot of the buffers that had kept oil surges in check between March and May.
Drained strategic and commercial inventories in many key oil-consuming economies, including the US, are setting the stage for further oil price rallies during the busiest oil demand season.
The just-declared Houthi blockade on Saudi maritime shipping has already begun to witness ill-effects, as reports emerge of two oil tankers having made U-turns while initially en route toward the Suez Canal. It was reported that their crews received threats from Houthi militants in Yemen.
The two oil tankers, which loaded Saudi crude for China and India, made U-turns in the Red Sea and headed toward the Suez following the warning from the militia.
Meanwhile, Kuwait’s power and desalination plants caught fire for a second straight day as US and Iran traded strikes for a tenth day.
As Russia’s war with Ukraine expands beyond Ukraine’s borders, the Caspian Pipeline Consortium (CPC) has stopped receiving oil from Kazakhstan after suspending loadings on Monday due to attacks on oil tankers at its Black Sea terminal.
By Adedapo Adesanya
The Senate has passed a bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
The Chairman of the committee, Mr Adetokunbo Abiru, the senator representing Lagos East, who presented the report, stated that the proposed legislation was necessary because the existing National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of Nigeria’s evolving insurance industry or global regulatory standards.
According to the Senate, the decision to change the Commission’s name was informed by the need to eliminate confusion associated with the existing designation and to better reflect the institution’s regulatory mandate within Nigeria’s insurance industry.
The bill also provides legal protection for the commission and its officers against adverse claims arising from the lawful execution of their statutory duties.
However, he noted that the commission’s enabling law had become obsolete, exposing significant regulatory gaps that required urgent legislative intervention.
‘The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” the lawmaker said.
He explained that the new legislation seeks to strengthen the independence of the commission by empowering it to make regulatory decisions without undue influence in the country’s insurance sector.
According to him, the bill also enhances the commission’s authority to exchange information and collaborate with domestic and international regulatory bodies, issue regulations, guidelines, standards and directives on insurance-related matters, and intervene more effectively in financially distressed insurance companies to protect policyholders and preserve financial stability.
This marks yet another move to strengthen the country’s insurance sector following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) of 2025 and the industry-wide recapitalisation exercise, which will wrap up by July 31.
