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Nigeria, Others to Spend $201.3 Billion on Petrochemical Industry

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  • Nigeria, Others to Spend $201.3 Billion on Petrochemical Industry

Global petrochemical industry is expected to spend around $201.3 billion by 2020 on different future projects.

According to a new report by BMI Research firm based in South Africa, released at the weekend, large capacity additions with more than 700 planned projects are expected to come online primarily in the China, US and Iran in the next five years.

Already, Dangote Group has invested over $20 billion into the construction of a refinery with a capacity of about 650,000 barrels of crude oil per day.

The investment is expected to cover gas pipeline infrastructure, power generation, petrochemical, fertilizer, sugar refinery and petroleum refinery in Nigeria.

The report noted that China Petroleum & Chemical Corporation, Janus Methanol AG and Petroliam Nasional Berhad are the top three companies by capacity additions expected to come on stream over the next five years.

It noted that the US, China and Russia are the top three countries by capital expenditure for projects by 2020.

The report expects global petrochemicals capacity to experience considerable growth in the next five years with increase from 1,457 million metric tonnes per annum (mmtpa) in 2015 to 1,735 mmtpa by 2020.

Nigeria refineries have been producing below installed capacity of over 450,000 barrels per day.

Specifically, for the month of November 2016, three of the nation’s refineries produced 178,107MT of finished petroleum products and 24,599MT of intermediate products out of 232,768MT of crude processed at a combined capacity utilisation of 12.78 per cent compared to 23.53 per cent combined capacity utilisation achieved in the month of October 2016.

The Nigerian National Petroleum Corporation (NNPC), which made this known in its current monthly financial report, said the adverse performance was due to crude pipeline vandalism in the Niger Delta region.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said that Nigeria was on the pact of becoming an exporter of refined petrol and other petrochemical products within the next four years if plans to ramp up the country’s domestic refining capacity worked out well.

He noted that if the plans to co-locate new refinery investments within the country’s existing refinery complexes in Kaduna, Warri and Port Harcourt become successful, and the private refinery owned by the Dangote Group comes on stream, Nigeria will produce more petrol than she needs and then export the excess.

He explained that it would take at least three years to get the co-located refineries to begin production, adding that Dangote’s is expected to come on stream between 2019 and 2020.

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.

Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

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Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.

The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.

According to Michael McCarthy, the Chief Market Strategies, CMC Markets, the surged in gold price is a result of the projected drop in dollar value or uncertainty.

He said, “The key factor appears to be the (U.S.) currency.”

As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.

Also, the effectiveness of the vaccines can not be ascertained until wider rollout.

Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.

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Crude Oil

Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

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Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.

Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.

While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.

On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”

“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.

Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.

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Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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