Connect with us

Economy

Oil Price May Fall to $44, Says Kachikwu

Published

on

oil
  • Oil Price May Fall to $44, Says Kachikwu

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said crude oil price may fall to $44 per barrel if the Organisation of Petroleum Exporting Countries fails to reach a consensus this week.

The Federal Government has proposed a crude oil benchmark price of $42.5 per barrel for the 2017 budget, compared to this year’s $38 per barrel.

Brent, against which Nigeria’s oil is priced, dropped to $47.12 per barrel on Friday from $49 per barrel on Thursday.

OPEC will meet on November 30 in Vienna, Austria, to assign output quotas after agreeing on a framework deal in September to tackle the supply glut in the global oil market.

“The challenge is less with OPEC and more with the outer forces we don’t control. The United States is beginning to ramp up volumes again,” Kachikwu told Bloomberg in an interview in Tokyo.

He said, “My greater worry is less than OPEC’s ability to find unity in these issues, which I think we will; and more the fact of how much a decision that we make impacts on the pricing issues.”

Kachikwu said oil price might rise slightly above $50 per barrel if a consensus was reached, and could fall as low as $44 without a deal.

Oil prices fell more than two per cent on Friday, dragged down by uncertainty over whether OPEC would reach an output deal, after Saudi Arabia said it would not attend talks on Monday with non-OPEC producers to discuss supply cuts.

Top OPEC oil exporter Saudi Arabia had told the producer group it would not attend talks on Monday with non-OPEC producers to discuss limiting supply, OPEC sources said.

The source added that Saudi Arabia wanted to focus on having consensus within the organisation first.

Russia still planned to attend lower-tier talks on November 28 ahead of the OPEC ministerial meeting on November 30, a Russian source familiar with the matter told Reuters.

Reports that the state oil giant, Saudi Aramco, would in January increase oil supplies to some Asian customers also cast a shadow on markets, traders said.

A decline in China’s October crude oil imports to their lowest on a daily basis since January added to the bearish tone.

But analysts said fundamentals were little changed – apart from concerns over the fate of this week’s deal.

On Thursday, the oil minister of a non-OPEC nation, Azerbaijan, said OPEC was also pushing oil producers outside the group to make big cuts in output.

Most analysts expect some form of cut, but it is uncertain whether that will be enough to prop up a market dogged by oversupply since 2014.

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

Economy

COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday

Published

on

oil 1

Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.

Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.

The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.

OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.

This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.

Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.

The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.

President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.

Continue Reading

Economy

Seyi Makinde Proposes N266.6 Billion Budget for Oyo State in 2021

Published

on

The Executive Governor of Oyo State, Seyi Makinde, has presented the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly on Monday.

The proposed budget titled “Budget of Continued Consolidation” was said to be prepared with input from stakeholders in all seven geopolitical zones of Oyo state.

Governor Makinde disclosed this via his official Twitter handle @seyiamakinde.

According to the governor, the proposed recurrent expenditure stood at N136,262,990,009.41 while the proposed capital expenditure was N130,381,283,295.63. Bringing the total proposed budget to N266,6444,273,305.04.

The administration aimed to implement at least 70 percent of the proposed budget if approved.

He said “The total budgeted sum is ₦266,644,273,305.04. The Recurrent Expenditure is ₦136,262,990,009.41 while the Capital Expenditure is ₦130,381,283,295.63. We are again, aiming for at least 70% implementation of the budget.”

He added that “It was my honour to present the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly, today. This Budget of Continued Consolidation was prepared with input from stakeholders in all seven geopolitical zones of our state.”

Continue Reading

Economy

World Bank Expects Nigeria’s Per Capita Income to Dip to 40 Years Low in 2020

Published

on

world bank

The World Bank has raised concern about Nigeria’s rising debt service cost, saying it could incapacitate the nation from necessary infrastructure development and growth.

The multilateral financial institution said the nation’s per capita income could plunge to 40 years low in 2020.

According to Mr. Shubham Chaudhuri, Country Director for World Bank in Nigeria, the decline in global oil prices had impacted government finances, remittances from the diaspora and the balance of payments.

Chaudhuri, who spoke during the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Government, said while the nation’s debt is between 20 to 30 percent, rising debt service remains the bane of its numerous financial issues and growth.

Nigeria’s problem is that the debt service takes a big part of the government revenue,” he said.

He said, “Crisis like this is often what it takes to bring a nation together to have that consensus within the political, business, government, military, civil society to say, ‘We have to do something that departs from business as usual.’

“And for Nigeria, this is a critical juncture. With the contraction in GDP that could happen this year, Nigeria’s per capita income could be around what it was in 1980 – four decades ago.”

Nigeria’s per capita income stood at $847.40 in 1980, according to data from the World Bank. It rose to $3,222.69 in 2014 before falling to $2,229.9 in 2019.

Continue Reading

Trending