The Nation Newspaper

Tag: oil market

  • Oil prices steady on trade talk hopes, OPEC cuts

    Oil prices were stable on Tuesday, supported by hopes that talks in Beijing between U.S. and Chinese officials might defuse trade disputes between the world’s biggest economies.

    OPEC-led supply cuts also tightened the markets.

    International Brent crude futures LCOc1 were at $57.42 per barrel at 0742 GMT, up 9 cents, or 0.2 per cent from their last close.

    U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $48.56 per barrel, up 4 cents, or 0.1 per cent.

    U.S. Commerce Secretary Wilbur Ross said on Monday that Beijing and Washington could reach a trade deal that “we can live with”.

    Read Also: Nigeria lost $2.8bn in revenue in 2018 — report

    Dozens of officials from China and the United States held talks in a bid to end a trade spat that has roiled global markets since last year.

    Despite optimism around the talks in Beijing, some analysts warned that the relationship between Washington and Beijing remained on shaky grounds, and that tensions could flare up again soon.

    “We remain concerned about the world’s most important bilateral relationship,” political risk consultancy Eurasia Group said in its 2019 outlook.

    “The U.S. political establishment believes engagement with Beijing is no longer working, and it’s embracing an openly confrontational approach…

    ”(And) rising nationalist sentiment makes it unlikely that Beijing will ignore U.S. provocations,” Eurasia Group said.

    There is also concern that a worldwide economic slowdown would dent fuel consumption.

    As a result, the hedge fund industry has cut back its bullish positions in crude futures.

    S&P Global Ratings said it had lowered its average oil price forecasts for 2019 by $10 per barrel to $55 and $50 per barrel, respectively.

    “Our lower oil price assumptions reflect slowing demand and rising supply globally,” said S&P Global Ratings analyst Danny Huang.

    Looking at oil supplies, 2019 crude prices have been supported by supply cuts from a group of producers around the Middle East-dominated OPEC as well as non-OPEC member Russia.

    “Crude oil prices have benefited from OPEC production cuts and steadying equities markets,” said Mithun Fernando, investment analyst at Australia’s Rivkin Securities.

    Looming over the OPEC-led cuts, however, is a surge in U.S. oil supply, driven by a steep rise in onshore shale oil drilling and production.

    As a result, U.S. crude oil production C-OUT-T-EIA rose by a whopping 2 million barrels per day (bpd) last year to a world record 11.7 million bpd.

    With drilling activity still high, most analysts expect U.S. oil production to rise further this year.

    Consultancy JBC Energy said it was likely that U.S. crude oil production was already “significantly above 12 million bpd” by early January.

  • Warmer weather, others threaten oil market

    Global oil demand growth looks likely to increase more slowly over the coming months, as warmer temperatures cut consumption. This may tilt the market back into surplus in the first half of next year, the International Energy Agency (IEA) said yesterday.

    In its monthly oil market report, the Paris-based IEA cut its oil demand forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd this year and 1.3 million bpd next year.

    Geopolitical tension in the Middle East and intermittent supply outages in the likes of Nigeria and Iraq have pushed oil above $60 a barrel for the first time since 2015, while global inventories have fallen, prompting many market watchers to raise their price forecasts.

    IEA said: “Does it mean the market has found a ‘new normal’ where the accepted floor might have moved from $50/bbl to $60/bbl? This might be a tempting view, assuming supply disturbances will continue and tensions in the Middle East will not ease.”

  • ‘How Trump’s presidency ‘ll benefit oil market’

    Nigeria may be on the verge of regaining its crude oil market share in the United States (U.S.) following President Donald Trump’s plan to build more infrastructural projects, The Nation has learnt.

    Nigeria’s exports to the U.S. fell from 950,000 barrels per day (bpd)  in 2010 to 57,000 bpd in 2015.

    Also, Angola suffered a decline in oil exports to U.S. as its exports fell from 484,000 bpd in 2009 to 124,000 bpd in 2015.

    However, all that has been confined to past as Trump plans to build more infrastructure for oil and gas.

    The former President, Association of International Energy Economist, Prof Adeola Akinnisiju, said if the plans materialise, it would open the door for production increase for Nigeria.

    He said Nigeria, which once had the U.S. as the main customer for exports, may find new opportunities to reignite its upstream sector as past oil selling agreements between the two countries become attractive once again.

    Akinnisiju said Nigeria was more likely to benefit from hypothetical unmet growing oil demand in the U.S. than Angola, adding that Angola had built stronger ties with China which is its main crude oil buyer in the recent years.

    He said the past two years witnessed low oil prices for U.S. and other countries, noting that the development created room for a considerable stocking of oil.

    Akinnisiju said: “For sometime now, members and non members of Organisation of Petroleum Exporting Countries (OPEC) have  had difficult times, getting enough earnings from the sales of crude oil. The development made U.S. and other countries to stock their oil, with the hope of selling it when the price goes up. The time has come for such countries to sell their crude and mak more money from it.’’

  • EU, OPEC back stable global oil market

    EU, OPEC back stable global oil market

    The European Union (EU) and the Organisation of Petroleum Exporting Countries (OPEC) have pledged their support to ensure a stable global oil market.

    After a joint roundtable tagged: “Prospective for Future Production of Non-Crude Liquids”, held in Brussels, Belgium, the two groups agreed that in the light of  current challenges in the energy markets, ongoing dialogues of this nature would continue to be of great importance. Both parties agreed that a stable and orderly energy market is essential for both producers and consumers, and a pre-requisite for achieving sustained world economic growth.

    The roundtable provided an outlook of the production levels of non-crude liquids around the world from 2000 to 2015. It outlined projected long-term supply estimates to 2040, using three different scenarios to enable a more detailed assessment of the potential outcomes.

    It also focused on non-crude liquids, which include natural gas liquids, biofuels and fuels derived from gas-to-liquids and coal-to-liquids processes. Based on the findings of the study, natural gas liquids (NGLs) and biofuels are expected to make up the majority of non-crude liquids supply in the long term, while gas-to-liquids and coal-to-liquids will most likely play a lesser role.

    It evaluated how these liquids might impact conventional fuel production, including bioethanol’s impact on gasoline supply, biodiesel production on diesel’s share of the market and NGLs’ market position in relation to liquefied petroleum gas.

    Other topics discussed included environmental impacts as well as regulatory issues and governmental policies, especially in relation to biofuels. It was agreed by both parties that the study was informative and useful in assessing the future outlook for non-crude liquids and any potential impacts they may have on their constituencies, either directly or indirectly.

    The parties concluded that continued dialogue and exchanges of views between the EU and OPEC were essential for improving understanding and supporting their mutual interests of promoting oil market stability and predictability.

    It was also agreed that the Roundtable’s deliberations and outcomes would provide valuable input to the next event held under the EU-OPEC Energy Dialogue, which would be the 13th high-level meeting to be held in Vienna, Austria in the first half of 2017.

    The event was co-chaired by Erlendas Grigorovic, Acting Head of Unit for the European Commission’s Directorate General for Energy and Oswaldo Tapia, Head of OPEC’s Energy Studies Department and Officer-in-Charge of the Research Division.

    The roundtable was part of the formal EU-OPEC Energy Dialogue, which was established in 2005 to promote the exchange of views on energy issues of common interest, including oil market developments, and the potential this has for contributing to stability, transparency and predictability in the market.

  • OPEC losing force on oil market control

    OPEC losing force on oil market control

    The Organisation of Petroleum Exporting Countries (OPEC) is gradually losing its force and control on the oil market. The collapse of oil producers meeting in Doha, Qatar was a worrisome signal because the presence of the organisation’s leader, Saudi Arabia, couldn’t make a difference.

    Although the organisation counts 13 countries among its membership, but Saudi Arabia has long reigned as a first among equals, coming handy whenever there was need to intervene in the global oil market especially at periods of low oil. Saudi Arabia produces about 10.2 million barrels per day (bpd), which is about a third of OPEC’s total output, and about 11 per cent of world supply.

    Last week’s failed talks in Doha to enact a production freeze, according to Platts report, saw a potential new oil producer group emerge with another player in the room that could have changed the dynamics of the market and challenged Saudi political eminence in world oil affairs.

    The Doha summit of 18 nations included 11 OPEC members and several major non-OPEC producers, most notably Russia, whose output surpasses Saudi Arabia’s at close to 11 million bpd, according to its energy ministry.

    Russia has geopolitical ambitions that in many cases do not align with Saudi Arabia’s, particularly in the Middle East, where the two have clashed over the civil wars in Yemen and Syria.

  • Buhari seeks OPEC members’ cooperation to stabilise oil market

    Buhari seeks OPEC members’ cooperation to stabilise oil market

    President Muhammadu Buhari has said members of the Organisation of Petroleum Exporting Countries (OPEC) and non-members should cooperate to find a solution to stabilise crude oil prices.

    Speaking at a bilateral meeting with the Sheikh Tamim Bin Hammad Al-Thani, the emir of the State of Qatar in Doha, Buhari described the market situation, which has seen oil prices plummet by 70 per cent since mid-2014, as “totally unacceptable”.

    Buhari, in a statement by the Special Adviser on Media and Publicity, Femi Adesina, said: “As members of OPEC and Gas Exporting Countries Forum (GECF), our relations in the areas of oil and gas, which our two nations heavily rely on, need to be enhanced and coordinated for the benefit of our people.

    “The market situation in the oil industry is unsustainable and totally unacceptable.

    “We must cooperate both within and outside our respective organisations to find a common ground to stabilise the market, which will be beneficial to our nations,” the President said on the second day of his state visit to Qatar.

    He hailed the cordial relations between the countries and invited Qatari investors to take advantage of the opportunities in Nigeria and invest in energy, agriculture, real estate, banking and finance.

    The President assured investors of government protection.

    He noted that in the course of his visit, the delegation from Nigeria and Qatar would formalise at least two bilateral agreements to boost economic cooperation.

    He weighed-in on the situation in the Middle East, praising Qatar for resolving the Syrian crisis, the Palestinian cause and efforts in reconstructing Gaza.

    “The conflicts in Yemen and Syria with their attendant humanitarian crisis need genuine international effort to solve. Nigeria, as a peace loving country, identifies with the Qatar in its peace efforts to end terrorism.

    “Nigeria is a victim of terrorism. It is with heavy heart that I stand before you and say activities of Boko Haram have led to loss of lives and the displacement of innocent people in our nation.

    “We, however, take pride to inform you that since coming to power, Boko Haram has been systematically decimated and are in no position to cause threat to our development programmes.

    “I wish to reiterate that Nigeria rejects violence and extremism, and assure you that we are with Qatar in your efforts to fight terrorism and injustice in your region and in the world.”

    The President called for a lasting solution to the Israeli-Palestinian conflict, saying “we like Qatar, favour a ‘Two-State’ solution, with the State of Palestine living side by side with the State of Israel.”

     

    Nigeria, Qatar sign pact on bilateral relations

    Nigeria and Qatar yesterday in Doha signed Bilateral Air Services Agreement (BASA) to pave the way for direct flights among their major cities.

    A statement by the Special Adviser on Media and Publicity, Femi Adesina, said both countries also signed an agreement to avoid double taxation and tax evasion on the sideline of President Muhammadu Buhari’s visit.

    The Minister of State for Aviation, Senator Hadi Sirika, representing the President, signed the air services agreement on behalf of the country while Qatar’s Minister of Transportation and Communications, Jassim Bin Saif Alsulaiti, signed on behalf of the Emir of Qatar, Sheikh Tamim Bin Hammad Al-Thani.

    The agreement, which was signed in the presence of both leaders, is expected to operate on the principle of reciprocity by the designated airlines on behalf of the countries.

    The Minister of Finance, Mrs. Kemi Adeosun, also signed the agreement to avoid double taxation and the prevention of fiscal evasion with respect to taxes income with its Qatari counterpart, Ali Shareef Al Emadi.

    It is also expected that the agreement on bilateral air service will promote trade, commerce and tourism between the two countries just as Nigeria has commenced discussions on partnership towards establishing a national airline for Nigeria.

    The agreement to avoid double taxation, which had been negotiated since February 2015, will bring in more investments and businesses between Qatar and Nigeria.