Economy
OPEC Increases Nigeria’s Crude Oil Quota by 3.4% to 1.799m/d
By Adedapo Adesanya
The Organisation of Petroleum Exporting Countries (OPEC) has increased Nigeria’s crude oil quota by 3.4 per cent or 27,000 barrels from 1.772 million barrels per day in June 2022 to 1.799 million barrels per day in July 2022.
This decision was taken at a meeting of the members of the organisation and it followed the increment of crude oil production by the bloc by 648,000 barrels per day in both July and August, 200,000 barrels per day more than scheduled under a supply agreement.
This is as it continues to bring forward the end of the historic output cuts implemented during the early days of the COVID-19 pandemic two years ago.
However, Nigeria will likely not be able to meet this target due to internal factors like breaches to its oil installations, especially in the Niger Delta region of the country.
The latest development was announced in a statement issued after its 29th OPEC and non-OPEC Ministerial Meeting held via videoconference on Thursday.
In the statement, OPEC also approved the highest production volume of 10.833 million barrels per day for Saudi Arabia and Russia.
As the United Arab Emirates (UAE) is to produce 3.127 million barrels per day, Iraq and Kuwait are to produce 4.580 million barrels per day and 2.768 million barrels per day respectively. The organisation ratified 1.753 million barrels per day for Mexico and 1.680million barrels per day for Kazakhstan.
The increase made Nigeria remain top of the list of its African counterparts followed by Angola which got approval for 1.502 million barrels per day.
According to OPEC, the meeting “advance the planned overall production adjustment for the month of September and redistribute equally the 0.432 mb/d production increase over the months of July and August 2022.
“Therefore, July production will be adjusted upward by 0.648 mb/d as per the attached schedule.”
The meeting, said the cartel, resolved to reaffirm the decision of the 10th OPEC and non-OPEC Ministerial meeting on 12 April 2020 and further approved in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on the 18 July 2021.
It also affirmed the production regulation plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.432 million barrels for the month of July 2022.
It extended the compensation period until the end of December 2022 as requested by some underperforming countries and request that underperforming countries submit their plans by 17 June 2022.
On compensation plans, OPEC said it should be submitted in agreement with the statement of the 15th OPEC and non-OPEC ministerial meeting.
It, however, restated the critical significance of observing total conformity and the compensation mechanism.
The meeting resolved to hold the 30th OPEC and non-OPEC Ministerial Meeting on June 30, 2022.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
By Adedapo Adesanya
The Naira appreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N14.79 or 0.9 per cent to trade at N1,534.50/$1 compared with the preceding day’s N1,549.29/$1 on Thursday, December 12.
The strengthening of the domestic currency during the trading session was influenced by the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN).
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN; publication of real-time prices and buy-sell orders data from this system has lent support to the Naira at the official market.
Equally, the local currency improved its value against the British Pound Sterling by N3.91 to wrap the session at N1,954.77/£1 compared with the previous day’s N1,958.65/£1 and against the Euro, the Nigerian currency gained N2.25 to sell for N1,610.41/€1 versus N1,612.66/€1.
However, in the black market, the Naira crashed further against the US Dollar on Thursday by N10 to quote at N1,680/$1 compared with Wednesday’s closing rate of N1,670/$1.
Meanwhile, the cryptocurrency market majorly corrected after earlier gains as US President-elect Donald Trump reiterated his ambition to embrace crypto assets, but a bond market rout dragged risk assets lower.
Mr Trump said, “We’re going to do something great with crypto” while ringing the opening bell at the New York Stock Exchange, reiterating his ambition to embrace digital assets in the world’s largest economy and create a strategic bitcoin reserve.
Alongside, the European Central Bank trimmed its benchmark interest rates by 25 basis points and in its dovish policy statement hinted that more rate cuts were likely to happen.
The biggest loss was made by Cardano (ADA), which fell by 4.9 per cent to trade at $1.10, followed by Ripple (XRP), which slid by 4.1 per cent to $2.33 and Dogecoin (DOGE) recorded a value depreciation of 2.9 per cent to sell at $0.4064.
Further, Solana (SOL) slumped by 1.8 per cent to $225.89, Binance Coin (BNB) slipped by 1.3 per cent to $746.92, Bitcoin (BTC) declined by 0.6 per cent to $99,998.18, Ethereum (ETH) crumbled by 0.5 per cent to $3,909.43, and Litecoin (LTC) dipped by 0.3 per cent to $121.52, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market slumped on Thursday, pressured by an expected increase in supply, supported by rising expectations of a Federal Reserve interest rate cut.
The International Energy Agency (EIA) made a slight upward revision to its demand outlook for next year but still expected the oil market to be comfortably supplied, with Brent crude futures losing 11 cents or 0.15 per cent to trade at $73.41 per barrel and the US West Texas Intermediate (WTI) crude futures declining by 27 cents or 0.38 per cent to finish at $70.02 per barrel.
The IEA in its monthly oil market report increased its 2025 global oil demand growth forecast to 1.1 million barrels per day from 990,000 barrels per day last month, largely in Asian countries due to the impact of China’s recent stimulus measures.
At the same time, the IEA expects nations not in the Organisation of the Petroleum Exporting Countries and Allies (OPEC+) group to boost supply by about 1.5 million barrels per day next year, driven by the US, Canada, Guyana, Brazil and Argentina – more than the rate of demand growth.
On Wednesday, OPEC cut its demand growth forecast for 2024 for the fifth straight month.
The IEA said that, even excluding the return to higher output quotas, its current outlook is to a 950,000 barrels per day supply overhang next year, which is almost 1 per cent of the world’s supply.
The Paris-based agency said this would rise to 1.4 million barrels per day if OPEC+ goes ahead with its plan to start unwinding cuts from the end of next March.
Next year’s surplus could make it harder for OPEC+ to bring back production. The hike was earlier due to start in October 2024, but OPEC+ has delayed it amid falling prices.
Meanwhile, inflation rose slightly in November increasing the possibility of a US Federal Reserve rates cut again as the data fed optimism about economic growth and energy demand.
Support also came as crude imports in China grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.
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