Oil prices held gains after the U.S. Energy Information Administration reported a surprise build in crude stockpiles.
U.S. commercial crude inventories rose by 1.3 million barrels in the previous week to a total of 541.3 million barrels, EIA reported.
Crude inventories in the week to May 13 fell by 1.1 million barrels to 541.9 million while analysts had expected a fall of 2.8 million barrels, American Petroleum Institute (APP) data showed on Tuesday.
International Brent crude futures were trading 19 cents above their last settlement at $49.47 a barrel at 10:36 a.m. ET (1436 GMT). The contract hit a 2016 high of $49.75 in intra-day trade the previous day.
U.S. West Texas Intermediate crude futures were 28 cents higher at $48.59 a barrel, off a 2016 high of $48.76 per barrel struck on Tuesday.
Brent crude prices had seesawed on Wednesday as the impact of unplanned supply disruptions from Nigeria and Canada were tempered by rising supplies from elsewhere.
“The impact of the supply disruptions is clearly bigger than most analysts had expected,” ABN Amro chief energy economist Hans van Cleef said.
Unscheduled supply outages in Nigeria and Canada amounting to around 2 million barrels per day (bpd) have supported oil prices in recent weeks.
Unknown attackers have blown up a gas pipeline belonging to Italy’s ENI in Nigeria’s restive Niger Delta, residents said on Wednesday. The attack occurred in Bayelsa state, they said.
The incident follows earlier attacks on a Chevron offshore platform and a Royal Dutch Shell pipeline claimed by a new group of militants called the Niger Delta Avengers. This week, Nigeria’s oil minister said sabotage had reduced the country’s output by 800,000 bpd to 1.4 million bpd.
“Both fundamentals and technicals are lined up for a move through the $50 hurdle,” oil brokerage PVM said in a note on Wednesday.
But analysts warned that rising supplies from other countries could weigh on prices once supply disruptions ease.
“There is … plenty of supply upside elsewhere, particularly in Iran,” Vienna-based JBC Energy said in a note on Wednesday.
Data from Iran shows oil exports from the country are recovering faster than analysts had expected.
Exports from the OPEC member country are set to surge in May to 2.1 million bpd, nearly 60 percent above their level a year ago, with European shipments recovering to about half of their pre-sanction levels, according to a source with knowledge of the country’s crude lifting plans.
Saudi Arabia’s crude oil exports in March, however, fell slightly to 7.541 million bpd from 7.553 million in February, official data showed on Wednesday.
JBC also warned that a rise in oil prices towards $50 per barrel could reverse some production declines among high-cost producers, including shale drillers in the United States.
Abuja to Kaduna Train Service to Resume on Monday, November 28, 2022
Barring any last-minute change, Abuja to Kaduna train service is expected to resume operation on Monday, November 28, 2022.
This is coming after eight months when operation along the route was suspended due to a deadly terrorist attack on the train.
It could be recalled that the attack which happened at night led to the death of no less than eight people while 168 passengers were kidnapped.
Early this month, the minister of transportation, Mu’azu Sambo disclosed during a presidential briefing that Abuja to Kaduna train service will resume operation before the end of this month, Investors King learnt.
Mu’azu noted that following the release of the last badge of those that were held hostage, the ministry has been putting security measures in place to forestall any future occurrence of such a sad experience.
Sources confirmed that contractors were at the Idu rail station to install the tracker and cameras which will enhance security along the train corridor.
Speaking in the same line, the Managing Director of the Nigeria Railway Corporation, Fidet Okhiria disclosed that the government has set up a high-level committee that will fine-tune a way to ensure adequate security for both the train passengers and the facilities.
“Government has set up a committee to ensure maximum security for both train passengers and facilities during operation. We believe proper security measures should be put in place and until then, the Federal Government won’t approve the functioning of the train station,” Okhira stated in September.
Meanwhile, the federal government has stated that millions of Nigerians will soon prefer to travel by train as the government is committed to connecting virtually all states in Nigeria to the train services.
The ministers of transportation who disclosed this during a working visit to the train station in Lagos State noted that the ministry has a number of ongoing rail projects which include Lagos to Kano, Port Harcourt-Maiduguri, and Kaduna to Kano.
He revealed that at the completion of the rail projects, it will be much easier for Nigeria to commute from one state to another.
Increase in Price of Food is Imminent; Farmers Association Warns
Farmers under the aegis of the Smallholder Women Farmers Organisation in Nigeria (SWOFON) have joined a growing list of associations and experts who have warned of food scarcity in Nigeria.
SWOFON noted during an event in Abuja that Nigerians will likely spend more on food if the federal government failed to address the challenges faced by farmers due to flooding.
Investors King had reported that a series of ravaging floods destroyed several houses and farmlands across the country.
According to the National President of SWOFON, Mary Afan, if relevant government agencies failed to give financial aid to farmers and improve security around the country, it could lead to high cost of food which might result in increased hunger for the vulnerable Nigerians.
“The implication of this massive flooding is that the prices of food will rise higher owing to its unavailability.
“This will deal a great blow to the over 90 million Nigerians currently leaving below the poverty line and the over 21 million Nigerians currently experiencing acute hunger,” the president noted.
She noted that small farmers who are women have lost many of their farmlands due to the ravaging floods. She added that members of the association are also short of seeds to plant during the next farming season.
“While some farmers are gradually returning to their homes as the water recedes to pick up whatever is left of the destruction, others cannot go back home or to their farms. Some have lost the courage to start all over and others have totally lost hope,” she lamented.
Also speaking at the event, the Director-General of the Budget Office of the Federation, Prof Ben Akabueze admonished the association to seek federal government intervention through the national assembly.
It could be recalled that the Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq had disclosed that about 123,000 farmlands were partially destroyed while about 392,000 farmlands were totally destroyed due to the devastating floods.
Nigerian Governors Forum Rejects Sale of 10 Power Plants by FG, Considers Legal Action
State governors objected sales of 10 power plants
The 36 state governors in Nigeria under the aegis of the Nigerian Governors Forum (NGF) have announced their rejection of the sale of 10 power plants in the country.
The governors who issued a communique noted that they going to file a lawsuit against the federal government to stop the privatisation.
According to the communique which was signed by the chairman of the Nigerian Governors Forum, Aminu Tambuwal, the forum has ordered its lawyers to approach the federal high court to stop the privatisation.
They argued that the power plants which are under the National Integrated Power Projects (NIPPs) and managed by the Niger Delta Power Holding Company (NDPHC) are owned by the three tiers of government. That is the federal, state governments, and local government councils.
Investors King could recall that in 2021, the National Council on Privatisation (NCP) approved the adoption of a fast-track strategy for the privatisation of five major power plants. The power plants include Geregu II in Kogi State, Omotosho II in Ondo State, Ihovbor in Edo State, Olorunsogo II in Ogun State, and Calabar power plants.
Other power-generating companies lined up for privatisation include Omoku Generation Company, Ogorode Generation Company, Gbarain Generation Company, Alaoji Generation Company, and Egebma Generation Company.
Although the House of Representatives had also objected to the privatisation, the Bureau of Public Enterprises (BPE) nonetheless announced that it has commenced due diligence assessment of the 16 pre-qualified investors shortlisted for the acquisition of the plants. A development that is in contrast to the position of the state governors.
Meanwhile, the governors’ forum also noted that it is working with the federal government to address the issue of flooding which has ravaged many homes and farmlands across the country.
The forum stated that all the affected states are collaborating with the Ministry of Agriculture and Rural Development, Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development, National Emergency Management Agency, the CBN, and the World Bank to ensure emergency interventions to ameliorate the adverse impact of the devastating flood.
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