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Oil Records First Loss in 10 Days as OPEC Trims Demand

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crude oil market

By Adedapo Adesanya

Crude oil went the negative route on Thursday, halting a nine-day gaining streak after demand recovery was trimmed even in the face of production cuts and hopes that rollouts of vaccines will drive recovery.

At the session, the price of the Brent crude depreciated by 19 cents or 0.31 per cent to sell at $61.28 per barrel, while the United States’ West Texas Intermediate (WTI) declined by 13 cents or 0.22 per cent to trade at $58.49 per barrel.

This happened as the Organization of the Petroleum Exporting Countries (OPEC) on Thursday trimmed its forecast for a rebound in global oil demand in 2021.

In its monthly report, OPEC said it expects oil demand to rise by 5.8 million barrels a day in 2021, down 100,000 barrels a day from its January forecast, to average 96.1 million barrels a day.

OPEC said that demand fell by 9.7 million barrels a day in 2020 to average 90.3 million barrels a day, slightly lowering its estimate by 30,000 barrels a day.

The cartel said its forecast for non-OPEC supply growth in 2021 was revised down by around 200,000 barrels a day to show a rise of 700,000 barrels a day, for an average of 63.3 million barrels a day.

The global crude benchmark, Brent, had risen for the previous nine sessions, its longest sustained period of gains since January 2019.

Earlier, the International Energy Agency (IEA), in its own monthly report, said that a recovery in demand will outstrip rising output in the second half of the year to prompt a rapid stock draw of the glut of crude built up since the outbreak of the coronavirus.

However, the IEA said it remains cautious about the outlook for oil demand in the first quarter, in part due to new COVID variants, and has downwardly revised its first-quarter forecast by 100,000 barrels per day, with demand now expected to decline by 110,000 barrels per day year-over-year, to 93.7 million barrels per day.

The Energy Information Administration (EIA) said in a monthly report issued Tuesday that it expects global consumption of petroleum and liquid fuels to rise by 5.4 million barrels per day in 2021. That forecast was down 200,000 barrels from the January forecast.

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.

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Economy

Brent Jumps 4% as US Stockpiles Shrink

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brent crude oil

By Adedapo Adesanya

The price of the Brent crude oil appreciated by more than 4 per cent or $2.61 on Wednesday as more positive news led by a drop in United States inventory and fresh positive expectation over oil demand boosted optimism about returning demand for crude.

During the trading day, the value of the commodity increased to $66.28 per barrel, while the price of its counterpart, the West Texas Intermediate (WTI) crude, rose by 4.9 per cent or $2.97 to $63.15 per barrel.

According to the Energy Information Administration (EIA), the US crude inventories fell by 5.9 million barrels last week, exceeding analysts’ forecasts of a 2.9 million barrels drop. In the preceding week, the agency reported an inventory draw of 3.5 million barrels.

The EIA’s inventory estimate comes a day after the American Petroleum Institute (API) reported a 3.6 million barrels inventory draw in crude oil for the same period.

Oil also found support based on a report from the International Energy Agency (IEA) that predicted global oil demand and supply were set to rebalance in the second half of the year. It added that producers may then need to pump an additional 2 million barrels per day to meet the expected demand.

The Paris-based agency noted that the global oil demand will grow 230,000 barrels per day faster than previously forecast.

World oil demand is now expected to expand by 5.7 million barrels per day in 2021 to 96.7 million barrels per day following a collapse of 8.7 million barrels per day last year, the IEA said.

This is coming a day after the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday raised its global demand forecast by 70,000 barrels per day from last month’s forecast and now expects global demand to rise by 5.95 million barrels per day in 2021.

Despite the stronger global economic indicators, the IEA said the recovery remains fragile given rising COVID-19 cases in some key countries and regions including Europe, India and Brazil.

Even with a wave of new lockdowns in Europe, the agency said it remains confident that the region’s vaccination program will accelerate in the coming months allowing for a boost in mobility in the second half of the year

The market is still concerned over near-term fuel demand as a result of surging COVID-19 cases in some major consuming countries, and now the news that vaccinations with Johnson & Johnson may be suspended temporarily because of rare blood clotting problems in several patients are also weighing on oil prices.

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Economy

DPR Mulls Alternative Dispute Resolution Centre in Lagos

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DPR Abuja headquarters

By Adedapo Adesanya

The Department of Petroleum Resources (DPR) has concluded plans to inaugurate the Advisory Council and Body of Neutrals of the oil and gas industry’s Alternative Dispute Resolution Centre (ADRC) in Lagos.

Mr Paul Osu, Head, Public Affairs, DPR, made this known in a statement issued in Lagos.

Mr Osu said that the centre would be inaugurated on April 15, pointing out that the ADRC was one of the centres in the DPR National Oil and Gas Excellence Centre inaugurated by President Muhammadu Buhari recently.

According to him, the centre will offer arbitration, mediation and conciliation services for the industry.

“The centre will leverage industry technical experts, Alternative Dispute Resolution Practitioners and resources of the National Data Repository to provide fair and balanced resolutions of industry-related disputes from an informed position.

”The ADRC is structured to adequately resolve disputes in a manner consistent with regulatory and commercial interests of the industry.

“This will address suboptimal development of oil and gas assets associated with lingering disputes,” he said.

Mr Osu added that this would eliminate the attendant consequences of value erosion in terms of national resource growth, global competitiveness, investment attractiveness and investor’s profitability.

The Department of Petroleum Resource (DPR) is a department under the Nigerian Federal Ministry of Petroleum Resources, DPR has the statutory responsibility of ensuring compliance with petroleum laws, regulations and guidelines in the Oil and Gas Industry.

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Economy

NGX Group Stocks Gain 2.31% on NASD Exchange

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NGX

By Dipo Olowookere

Equities of Nigerian Exchange (NGX) Group on the NASD over-the-counter (OTC) Securities Exchange closed positive on its first trading session.

The NGX Group stocks formally joined the unlisted securities market in Nigeria on Tuesday and started their first full trading day today.

The demand for the equities of the demutualised exchange, which is running as a non-operating holding company, surged on Wednesday, causing its value to rise by 2.31 per cent.

Business Post reports that NGX Group stocks were listed on the NASD Exchange yesterday at a unit price of N25 and at the market today, they rose to N25.59.

According to data obtained by this newspaper, the firm listed a total of 1,900,000,000 units of its securities on the alternative bourse, boosting the market capitalisation by N48.6 billion.

The exchange used to be known as the Nigerian Stock Exchange (NSE) but after its conversion, it became NGX Group Plc with three subsidiaries: Nigerian Exchange (NGX) Limited, the operating exchange; NGX Regulation (NGX RegCo) Limited, the independent regulatory arm of the exchange; and NGX Real Estate (NGX RelCo) Limited, the real estate company.

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Economy

Our Worry Not Current Debt Levels—FG

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Zainab Ahmed Debt Levels

By Dipo Olowookere

The federal government has described the current debt levels of Nigeria as comparatively good, noting that the major worry, for now, is how to diversify the economy to increase the revenue sources.

Last week, the Governor of Edo State, Mr Godwin Emefiele, shocked many Nigerians when he said the nation was currently undergoing a huge fiscal crisis.

He said the federal government printed N60 billion to share to the state governments in March 2021 when the revenue generated in February was not enough to meet the demands of the other tiers of government. This sparked reactions from Nigerians.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, while speaking with the Africa Department Director of the International Monetary Fund (IMF), Mr Abebe Selassie, blamed COVID-19 for the challenges the nation was passing through at the moment, saying that the country was gradually getting back on its feet when the global health pandemic struck in 2020 and reversed the gains achieved so far.

However, she said the careful implementation of some policies of the government ensured that Nigeria exited recession it slipped into last year with the 0.11 per cent growth in the gross domestic product (GDP) in the fourth quarter of 2020.

“Although the GDP recorded a growth rate of 0.11 per cent (year-on-year) in the fourth quarter of 2020, in contrast to -3.62 per cent in Q3 2020 and 2.55 per cent in the corresponding period of 2019 (NBS), and inflation creeping through 17.33 per cent, we are a bit encouraged by the recent IMF forecast of 2.5 per cent,” she said.

The Minister praised the effectiveness of the Economic Sustainability Plan (ESP) with the support of development partners, including the World Bank Group (WBG) last year.

According to her, the policy trade-offs of the government quickly filled the deepening gaps created by the COVID-19 crisis as “it did not only push us back to a recession but also reversed most of the development gains recorded in the past decade.”

Debt levels sustainability

While commenting on the nation’s debt sustainability, Mrs Ahmed said that the government was committed to addressing the issue as the administration was “mindful of our experiences in this regard and the credibility and commitment of President Buhari to transparency and accountability in public expenditure.”

“We take note that our current debt levels are comparatively good, but we are aware of the pressures on debt services and commend the WBG and The Group of Twenty (G20) for the debt service suspension initiative (DSSI).

“However, with current obvious limitations of the DSSI, we may not embrace it, and would prefer to focus on diversifying our economies and enhance efforts at revenues mobilisation and other best practices and would appreciate the understanding and strong support of the IMF in expanding the monitoring and reporting of all public spending, as well as ensuring easy public access to spending data.

“We commend the extension of the DSSI to 2021 as a positive step, but there is a need to address the apparent reluctance of the private creditors to participate in the initiative as their participation will ensure a meaningful treatment of debt challenges of countries requesting support under this framework,” she said.

COVID-19 vaccine supply

The Minister said discussions with multilateral institutions such as the IMF could not be thorough without discussing the ongoing COVID-19 vaccination.

“The vaccination programme for Nigeria has been progressive and is gradually yielding needed results.  As at the time of this meeting, slightly less than a million doses of the vaccine have been administered, representing less than 0.5 per cent of the population of the country.

“We are working assiduously to cover much ground by ensuring that as many as are willing to be vaccinated are promptly attended to,” she said.

She further said, “However, Nigeria like many countries in Africa, is concerned about adequate supply. The proper thing maybe for producer countries to release their excess stock of vaccines to developing countries that currently have limited or no access.

“We would appreciate your assistance in that regard. Similarly, multilateral institutions such as the IMF/World Bank are encouraged to continue to pool resources together, particularly the COVAX facility and the African Union (AU) initiative to support local manufacturers in the production of vaccine in Africa.  “

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Economy

Nigeria Begs France for Additional Loan

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quick loan

By Aduragbemi Omiyale

The federal government of Nigeria has appealed to France to grant it an additional loan aimed to develop the country and provide the dividends of democracy to the citizens.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, made his plea when she received the French Foreign Trade Minister, Mr Frank Reister, at her office in Abuja recently.

Mrs Ahmed described the credit facility of the European country as “highly concessional” and that it would support the government’s development agenda.

The Minister said the government was happy to have the French government as a partner, reiterating the commitment of the administration of President Muhamadu Buhari to a stronger bilateral tie with France

She also expressed the commitment of the nation to accelerating the preparation of the health project in Oyo State to ensure the effectiveness of the project.

In his remarks, Mr Reister commended the government for its different development strides, explaining that he was in Nigeria to “strengthen the Nigeria/French bilateral relations and to strategise with the government and other stakeholders on how to improve the present relationship.

“We want to strengthen the links between the French and Nigerian private sectors,” the French Minister declared.

“We want to look at our long-term investments, fight against climate change, explore financing options for different projects in Nigeria and support Nigeria in its gas project,” he said.

The visit is coming on the heels of the summit of African economies in Paris in May 2021, where President Muhammadu Buhari will be attending with others to deliberate on the objectives to help boost a strong inclusive recovery in Africa and accelerate the green and digital transition in line with the sustainable development goals (SDGs) and Paris Agreement on climate change.

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Economy

BUA Cement Lists N115bn Bond on Nigerian Exchange

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BUA Cement NSE

By Dipo Olowookere

The N115 billion 7-year series I fixed rate senior unsecured bond of BUA Cement Plc has been listed on the trading platform of the Nigerian Exchange (NGX) Limited.

The paper was admitted on the exchange on Tuesday, April 13, 2021, and to commemorate it, the CEO of BUA Cement, Mr Yusuf Haliru Binji, was honoured with the digital closing gong ceremony.

Mr Binji thanked the management of NGX Limited for the invitation to bring trading activities to a close, describing it as “another key milestone on our journey to becoming the preferred cement manufacturer in Africa.”

He explained that the cement maker accessed the debt capital market to source for N100 billion “as part of our growth strategy.”

The BUA Cement chief said the decision to raise more than N100 billion in the first tranche of the firm’s N200 billion programme was due to the “overwhelming response and in accordance with the Securities and Exchange Commission’s guidelines.”

“For us, this was a clear assessment of our viable business model, strong financial performance, and the strength of our product offerings,” Mr Binji stated.

Speaking on behalf of the parties to the transaction, the CEO of Stanbic IBTC Capital, Mr Funso Akere, expressed the delight of the organisation at being the adviser to BUA Cement Plc on the transaction “where they took advantage of very supportive conditions in the debt capital market to raise long term funding.”

“On behalf of Stanbic IBTC Capital Limited, Tiddo Securities and Union Capital, we would like to thank BUA Cement for giving us a freehand to guide them and the commitment showed to make the transaction a phenomenal success. We would also like to thank NGX for giving us a platform to list the bonds,” Mr Akere said.

On his part, the Divisional Head of Listings Business at NGX Limited, Mr Olumide Bolumole, stated that the exchange was “excited about BUA Cement’s debut bond offering which was oversubscribed by 37 per cent to the tune of N137.82 billion and represents the largest amount raised by a corporate issuer in the history of Nigeria’s debt capital market.”

“Without a doubt, this is a testament to the high level of confidence placed on this reputable brand by its investors and the entire market,” he said.

Mr Bolumole added that, “In line with its commitment to support Nigeria’s economic growth by providing a liquid, efficient, and multi-asset securities exchange hub, NGX Limited continues to provide a platform that offers investors varied options including equity, fixed income, Exchanged Traded Products (ETPs) and other funds.”

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