Economy
OPEC Revises Oil Demand Growth to 95.89mb/d in 2021
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has revised down its global oil demand growth forecast for 2021 as a result of uncertainty surrounding the COVID-19 pandemic despite the roll-out of vaccines in several countries.
The oil cartel in its latest Monthly Oil Market Report (MOMR) forecast that demand will total 95.89 million barrels per day next year in contrast to its previous forecast of 96.26 million barrels per day.
The downward revision reflects the uncertainty surrounding the impact of COVID-19 on transportation fuels in the Organisation for Economic Co-operation and Development (OECD) economies in the first half of next year.
OPEC estimates their recovery to be capped at 2019 levels and forecasts for a mild winter in the northern hemisphere are pressuring the outlook for middle distillates demand.
Economic growth next year and the related impact on oil demand recovery depends on uncertainties surrounding the pandemic, policies of the incoming US administrations, Brexit and trade negotiations, the cartel said.
Recent news regarding vaccination programmes in most major economies provides upside to next year’s GDP growth forecast of 4.4 per cent.
The UK became the first country to start rolling out the COVID-19 vaccine that US firm Pfizer has developed with Germany’s Biontech earlier this month.
The organisation assumes vaccines will be gradually available globally by the second half of 2021. It said, “Earlier availability would allow a faster-than-anticipated move towards normalisation,” the report said.
Lower transportation fuel demand in the US and OECD Europe led to a downward revision in OPEC’s demand forecast for 2020, which is now pegged at 89.99 million barrels per day, 9.77 million barrels per day lower than 2019. In November, the OPEC report predicted a 9.75 million barrels per day drop in this year’s consumption.
On the supply side, non-OPEC liquids have been revised lower for this year and for 2021. Non-OPEC supply is now expected to average 62.67 million barrels per day this year, down by 2.5 million barrels per day from 2019.
Last month’s report estimated a 2.43 million barrels per day drop to 62.73 million barrels per day. This change reflects lower-than-expected output in the fourth quarter of 2020, mainly in the US, partially offset by revisions to output in Russia and Canada.
Non-OPEC supply is forecast to rebound by 850,000 b/d to average 63.52 million barrels per day next year, a slower pace of growth than the 950,000 barrels per day increase predicted in last month’s MOMR.
“This is mainly due to downward revisions to Russia, following the new decision taken at the recent ministerial meeting of the OPEC and Non-OPEC countries participating in the declaration of co-operation,” the report said.
The trimmed Non-OPEC supply forecast for this year has resulted in an upward revision to the call on OPEC members’ own crude, which is now estimated at 22.2 million barrels per day in 2020, down by 7.1 million barrels per day from 2019. But the forecast call on OPEC crude for next year has been revised down by almost 200,000 barrels per day from last month’s report, to 27.17 million barrels per day.
OPEC crude production averaged 25.11 million barrels per day in November, up by 707,000 barrels per day from October.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 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, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said 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.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 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 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.
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