- Consumer Prices in U.S. Increase for Third Consecutive Month
The cost of living in the U.S. rose for a third consecutive month, driven by fuel and housing, indicating inflation is moving closer to the Federal Reserve’s goal.
The consumer-price index climbed 0.4 percent in October from the previous month after a 0.3 percent gain in September, Labor Department figures showed Thursday in Washington. That matched the median forecast in a survey of economists. Excluding volatile food and fuel, the so-called core measure rose 0.1 percent, just below the estimate of 0.2 percent.
Firming inflation and a healthy job market have laid the groundwork for Fed officials to raise interest rates when they meet next month. With energy costs grinding higher, price pressures will have room to gain traction more broadly in the economy, while companies may begin to gain greater pricing power amid steady consumer demand.
“We’re seeing a gradual uptrend in inflation,” Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report. “It’s one more factor that locks in a Fed hike in December.”
The Fed’s preferred gauge of inflation, which is the Commerce Department’s personal consumption expenditures measure, hasn’t matched the central bank’s 2 percent goal since April 2012.
Fed Chair Janet Yellen said Thursday that a rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress.” Policy makers are due to hold their final meeting for the year on Dec. 13-14, and the odds of an interest-rate increase were close to 100 percent on Thursday, according to trading in fed funds futures.
Economists forecast for the consumer price index ranged from a decline of 0.1 percent to a gain of 0.5 percent.
The consumer price gauge increased 1.6 percent in the 12 months ended in October, after a 1.5 percent year-over-year advance the prior month.
The rise in the core CPI measure followed a 0.1 percent gain in the previous month. It increased 2.1 percent from October 2015, after rising 2.2 percent in the prior 12-month period.
The median projections in the Bloomberg survey called for the core gauge to rise 0.2 percent from the previous month, and to climb 2.2 percent from the prior year.
Energy costs increased 3.5 percent from a month earlier, with gasoline up 7 percent and accounting for more than half of the increase in the overall index, the report showed. Food prices were little changed.
“Oil prices are finding an equilibrium,” Englund said. “We’re losing the drag on the headline inflation number. Any remnants of concern about deflation are evaporating.”
Expenses for shelter climbed 0.4 percent for a second month. Owners-equivalent rent, one of the categories designed to track rental prices, was up 0.3 percent.
Americans paid 0.2 percent more for new automobiles. Clothing prices rose 0.3 percent, while airfares decreased 2.2 percent.
Expenses for medical care were little changed. These readings often vary from results for this category within the Fed’s preferred measure of inflation. Economists attribute the discrepancy to different methodologies.
The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60 percent of the index covers prices consumers pay for services from medical visits to airline fares, movie tickets and rents.
The cost-of-living increase offset most of the gain in paychecks in October, a separate report from the Labor Department showed Thursday. Hourly earnings adjusted for inflation rose 0.1 percent from the prior month. They were up 1.2 percent over the past 12 months.
Seplat Energy Plc Records $535 Million in Revenue in the First Nine Months of 2021
Seplat Energy, a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, recorded $535 million in revenue in the nine months that ended 30 September 2021.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at $266.4 million while cash realised from operations was $163.8 million, the company stated in its unaudited financial statements for the period.
Total expenditure for the period was $83.9 million. Cash at the bank was estimated at $273.9 million and the energy company posted $479.8 million as net debt. See other details below.
- YTD working-interest production of 47,280 boepd down 6.7% year on year largely as a result of the shut-in of the Forcados Oil Terminal (FOT) in August (Q3: 40,381 boepd)
- Liquids production down 16.6% year on year at 27,804 bopd, recovering to 33kbopd liquids in October
- Gas production up 13% to 113 MMscfd, despite FOT impact on associated gas
- Completed two gas wells and three oil wells in the period, new Gbetiokun wells performing strongly
Financial highlights (9M 2021)
- Revenue after adjusting for an underlift was $535 million
- EBITDA of $266.4 million
- Cash generated from operations $163.8 million
- Cash at bank $273.9 million, net debt of $479.8 million
- Total capital expenditure of $83.9 million
- Interim dividend of 2.5 cents ($0.025)
- Name changed to Seplat Energy Plc to reflect new strategic vision outlined in July; new branding launched in October
- Acquisition of Cardinal Drilling rigs for $36 million and cessation of legal proceedings by Access Bank Outlook for 2021
- Expected production narrowed to 48-50 kboepd for full year, subject to market conditions
- Amukpe-Escravos Pipeline (AEP) commissioning has commenced, oil flow expected in December 2021
- Capex now expected to be $167 million for the full year
- ANOH project remains on track for first gas in H1 2022
Commenting on the financial statements, Roger Brown, Chief Executive Officer, said: “Production has recovered strongly since the outage at Forcados Oil Terminal (FOT) and we have been averaging nearly 33kbopd liquids throughout October. Now that production has normalised, we expect production to be in the range 48-50 kboepd for the year, provided uptime on the Forcados Pipeline and FOT remains above the budgeted 80%. I’m pleased to report that our new wells at Gbetiokun are performing strongly, and we will soon commence drilling the exciting Sibiri prospect on OML40.
“We have taken the difficult, but practical decision to bring an end to the uncertainty of the Access Bank legal dispute regarding Cardinal Drilling Services, which completes the Board-mandated removal of Related Party Transactions.
“Although we maintain our previously stated position that legal action against the Company was wholly without merit, the risk of significant disruption to our operations and other opportunities from a long, drawn-out legal case brought us to a negotiated settlement with Access Bank. We have therefore acquired the four Cardinal rigs and we are now focusing on fast tracking their deployment in future drilling campaigns. `
“Our business model is robust, despite setbacks in the third quarter, thanks to the prudent and flexible approach we have taken to managing the business. With an increased focus on efficiency in our operations, improving uptime by opening up the Amukpe to Escravos Pipeline and driving further cost reduction across our portfolio, this will provide the bedrock allowing us to operate effectively in fluctuating commodity prices and generate returns for shareholders. I am optimistic that the coming year will be much stronger, with many of the problems of the past put behind us.
“After we set out our future strategy in July’s Capital Markets Day and launched our new corporate name of Seplat Energy plc, complete with its new branding, we are now focusing on building out and executing the energy transition that is right for Nigeria. A strong step forward will be when we bring on stream the ANOH project next year delivering more transition gas to an energy poor market, over reliant on expensive, high carbon-emitting electricity generated from small-scale diesel and PMS generators. Our three-pillar strategy is designed to ensure we balance carbon emission reduction with the essential social agenda for undeniably the most under-electrified, youngest and fastest growing population on earth.”
Crude Oil Drops on Wednesday as U.S. Oil Inventories Jump Unexpectedly
Global oil prices fell by 1 percent on Wednesday after data from the U.S. Energy Department showed that the United States oil inventories unexpectedly rose by 4.3 million barrels last week. More than the 1.9 million barrels predicted by experts.
The unexpected increase in United States inventories weighed on crude oil prices on Wednesday, erasing $1.31 or 1.5 percent from Brent crude oil after it rose to a seven-year high on Tuesday. While the U.S West Texas Intermediate (WTI) dipped by $1.09 or 1.3 percent to $83.56 a barrel.
Still, gasoline stocks declined by 2 million barrels across the United States, a situation likely to push pump prices even higher.
“The market continues to deplete Cushing crude oil inventories and that is impacting the Brent-WTI spread and ultimately we’re going to see crude oil diverted from the Permian up to Cushing rather than going to the Gulf Coast,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
However, the shaky COVID-19 recovery in most economies has led to doubts over the sustainability of rising oil prices.
“(Some) countries are falling into an autumn Covid-19 case spike,” said Louise Dickson, senior oil markets analyst at Rystad Energy, “which poses downside risk for oil demand growth in the very near-term and could provide a soft pressure on oil prices.”
Brent Crude Oil Extends Gain to $86.66 a Barrel Amid Tight Supply
Tight global oil supply pushed Brent crude oil, against which Nigeria oil is priced, to a multi-year high of $86.66 per barrel on Monday at 3:30 pm Nigerian time.
Oil price was lifted by rising fuel demand in the United States and tight global supply as economies recover from pandemic-induced slumps.
“The global energy supply crunch continues to show its teeth, as oil prices extend their upward march this week, a result of traders pricing in the ongoing rise in fuel demand – which amid limited supply response is depleting global stockpiles,” said Louise Dickson, senior oil markets analyst at Rystad Energy.
Goldman Sachs on the other hand is predicting a further increase in Brent crude oil to $90 a barrel, citing a strong rebound in global oil demand due to switching from gas to oil. This the bank estimated may contribute about 1 million barrels per day to global oil demand.
The investment bank said it expects oil demand to reach around 100 million barrels per day as consumption in Asia increases after the devastating effect of COVID-19.
“While not our base-case, such persistence would pose upside risk to our $90/bbl year-end Brent price forecast,” Goldman said in a research note dated Oct. 24.
Earlier this month, the Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+ agreed to continue increasing oil supply by 400,000 bpd a month until April 2022 despite calls for an increase in global oil supplies.
The decision bolstered the price of Brent crude oil above $84 per barrel and expected to push the price even further to $90 a barrel. Low global oil supply amid rising demand for crude oil will continue to support oil prices in the near term.
“Despite the recent power cuts and impacts to industrial activity in China, oil demand is likely instead supported by switching to diesel powered generators and diesel engines in LNG trucks, as well as by a ramp up in coal production,” Goldman Sachs stated.
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