- Nigeria’s Gas Revenue Drops by 50.2 Percent
Gas proceeds from the Nigeria Liquefied Natural Gas and others have dropped by 50.2 per cent from $169.728m in January, the latest data from the Nigerian National Petroleum Corporation have showed.
The NNPC put gas proceeds from the NLNG, Escravos Gas to Liquid, Natural Gas Liquids and NGAS in October at $84.575m.
“Export gas sales and NLNG feedstock accounted for $84.57m i.e. 18.97 per cent contribution to the Federation Account compared with 31.21 per cent contribution in September,” the corporation said in its latest monthly report.
The dip in gas revenue was partly as a result of the sustained fall in global natural gas prices since last year and increased supply in the market.
From a peak of $6 per million British thermal unit last year, the natural gas price has fallen below $2 per mmBtu this year. It was trading around $1.98 per mmBtu.
The NLNG Limited had recently warned that its revenue was being threatened at the international market amid the fall in global oil prices.
Many of the global natural gas markets are linked to oil prices, which have fallen by more than 65 per cent since June last year.
The firm expressed worry over the impact that the fall in crude prices was having on its revenue, stressing that the entry of the United States and Australia into the LNG market was “a real cause for concern.”
The NLNG stated, “The recent fall in crude oil prices from above $100 per barrel in early 2014 to below $60 per barrel in early 2015 and its impact on global LNG/gas prices as well as the demand/supply positions in both our primary and secondary markets in the Atlantic and Pacific Basins have had a significant impact on our revenues and profitability.
“The trend, which will persist till the end of 2015, and which may even worsen going into 2016 with the entry of US and Australian LNG volumes into the market, is a real cause for worry.”
The NLNG, in addition to its traditional deliveries to Europe and the United States, supplies LNG to South America, with deliveries to Mexico and Brazil; and to Asia and the Middle East, with deliveries to Japan, South Korea, India, China, Taiwan, Thailand and Kuwait.
The company, which currently has LNG production capacity of 22 million metric tonnes per annum, is owned by the Federal Government, represented by the NNPC (49 per cent), Shell Gas BV (25.6 per cent), Total LNG Nigeria Limited (15 per cent), and Eni International (10.4 per cent).
Gold Prices Rise as Soft Dollar Supports Safe-haven Appeal
Gold prices firmed on Monday, propped up by a subdued dollar and slight retreat in the U.S. Treasury yields, with investors gearing up for a week of speeches from U.S. Federal Reserve policymakers for cues on the central bank’s rate hike path.
Spot gold was up 0.5% at $1,759.06 per ounce, as of 0400 GMT, while U.S. gold futures were up 0.4% at $1,759.00.
While the dollar index softened, the benchmark 10-year Treasury yields eased after hitting their highest since early-July. A weaker dollar offered support to gold prices, making bullion cheaper for holders of other currencies.
“Gold is still looking slightly precarious where it is right now, and it’s probably bouncing off key technical level around $1,750,” IG Market analyst Kyle Rodda said.
“Gold remains an yield story and that yield story is very much tied back to the tapering story.”
A slew of Fed officials are due to speak this week including Chairman Jerome Powell, who will testify this week before Congress on the central bank’s policy response to the pandemic.
“There’ll be a lot of questions being put to Fed speakers about what the dot plots implied last week and weather there is higher risk of heightened inflation going forward and that rate hikes could be coming in the first half of 2022,” Rodda added.
A pair of Federal Reserve policymakers said on Friday they felt the U.S. economy is already in good enough shape for the central bank to begin to withdraw support for the economy.
Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.
Investors also kept a close watch on developments in debt-laden property giant China Evergrande saga as the firm missed a payment on offshore bonds last week, with further payment due this week.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 0.1% to 993.52 tonnes on Friday from 992.65 tonnes in the prior session.
Silver rose 0.9% to $22.61 per ounce.
Platinum climbed 1.3% to $994.91, while palladium gained 0.7% to $1,985.32.
Brent Crude Oil Near $80 Per Barrel Amid Supply Constraints
Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Brent crude was up $1.14 or 1.5% at $79.23 a barrel by 0208 GMT, having risen a third consecutive week through Friday. U.S. Oil added $1.11 or 1.5% to $75.09, its highest since July, after rising for a fifth straight week last week.
“Supply tightness continues to draw on inventories across all regions,” ANZ Research said in a note.
Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation, ANZ analysts said in the note.
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic.
China’s first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels.
India’s oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.
Oil Holds Near Highest Since 2018 With Global Markets Tightening
Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.
Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.
China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.
Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.
“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.
Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.
At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.
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