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Electricity Generation Drops by 740MW



  • Electricity Generation Drops by 740MW

Nigeria’s electricity generation has dropped by over 740 Mega Watts (MW) from the 4,202.7MW recorded in September to 3,462.1MW, according to data from the Transmission Company of Nigeria (TCN).

The TCN in its daily generation report on Tuesday, put the lowest electricity generation at 2,992.0MW while its peak output stood at 3,500.10MW.

Despite gas supplyconstraint to power plants, the country has in the last three months enjoyed stable electricity, which was made possible by the hydro power plants.

But gas constraint, the Nigerian Electricity Supply Industry (NESI), said made the country’s power sector to suffer a deficit of about N2.033 billion on October 31 alone.

NESI stated: “On October 31 2016, average power sent out was 3288MWh/hour. The reported gas constraint was 4035MW. The reported line constraint was 20MW and the reported high frequency constraint is 180MW. The water management constraint was 0MW. The power sector lost an estimated N2.033 billion on October 31 2016 due to constraints.”

Speaking on the issue of gas constraints to power plants at the Nigerian Gas Association (NGA) conference in Abuja, President of the association, Bolaji Osunsanya, said Nigeria’s current gas production can deliver 32GW if fully deployed for power.

This notwithstanding, Osunsanya said the country would still be behind India, South Africa and many other developing economies in making sizeable quantities of gas available for domestic electricity consumption.

According to him, gas fuelled generation accounts for only about 2.5GW of current generation.

Due to poor planning, he noted that a further 2GW of generating plants are stranded with no gas supply. “This would seem to underscore the size of the opportunity that exists to fill this obvious gap. Gas supply has been highlighted as the weak link in the development of the power sector. While we would not debate how we got here, we will rise up to the challenge of ensuring that gas is made readily available for the development of the electricity supply industry. It is clear that with a focused development, domestic gas can be harnessed to fuel the entire power demands of the country and beyond,” he added.

Osunsanya said the issues bedevilling the power sector must be addressed at the same time. “The cash collections in the system must be adequate to support any development in the sector including Gas development and supply, Power Generation, Transmission and Distribution. The regulators and other government agencies, such as the Bulk Trader and the Ministries of Finance, Power and Petroleum, must come to a common understanding of the imperatives of the sector so that we begin to solve the problem. A top priority would be the securitisation of investments in the sector and appropriate pricing of the building blocks.”

He said that more investment in the gas sector would help to provide the necessary output for the power sector.

Osunsany hinted that the scale of investment in the gas sector needs new thinking.

Entrusting International Oil Companies (IOCs) or the Federal Government to develop the required gas infrastructure, he noted, worked to an extent in the past, adding that the public and private sector must now work hand-in-hand on future developments.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday



Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts




Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin



Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.


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