Connect with us

Economy

Nigeria Loses as US oil Attracts More Buyers

Published

on

Crude oil
  • Nigeria Loses as US oil Attracts More Buyers

Nigeria has lost some of its market share in Europe, its biggest regional market, as crude oil exports from the United States penetrate more destinations.

The US had in December 2015 removed the 40-year-old restrictions on its crude exports following the rapid growth of its oil production from 2013 to 2015.

The US Energy Information Administration said on Tuesday that the country exported crude oil to 26 different countries in 2016, compared with 10 countries the previous year.

Among the countries were buyers of Nigeria crude including Netherlands, China, Italy, the United Kingdom, Colombia, Singapore, Peru, France and Spain.

The US crude oil exports averaged 520,000 barrels per day in 2016, 55,000 bpd or 12 per cent above the 2015 level, despite a year-over-year decline in domestic crude oil production, the EIA said.

According to the agency, in 2015, 92 per cent of the US crude oil exports went to Canada, which was exempt from the US crude oil export restrictions. After restrictions were lifted, Canada remained the top destination but received only 58 per cent of the US crude exports in 2016.

The EIA said, “Aside from Canada, European destinations such as the Netherlands, Italy, the United Kingdom, and France rank high on the list of the US crude oil export destinations.

“The second-largest regional destination is Asia, including China, Korea, Singapore, and Japan. In 2016, the United States exported to eight different Central and South American destinations, including Curacao, Colombia, and Peru.”

The Netherlands, which is one of the biggest European buyers of Nigerian crude, received 38,000 bpd of the US crude oil in 2016, making it the second-largest destination after Canada.

The country’s monthly import of Nigerian crude oil plunged to an average of 3.7 million barrels last year, up from 9.1 million barrels in 2015, data from the Nigerian National Petroleum Corporation showed.

Italy bought 23,000 bpd of the US crude oil; China imported 22,000 bpd, while the UK and Colombia purchased 17,000 bpd and 9,000bpd, respectively.

Singapore received 11,000 bpd of the US crude oil; Peru, 7,000 bpd; France, 7,000 and Spain bought 4,000 bpd, the EIA data indicated.

Spain saw its monthly import of Nigerian crude fall to an average of 4.7 million barrels in 2016 from 6.1 million barrels, while that of France averaged 3.4 million barrels compared to 4.1 million barrels in 2015, the Nigerian National Petroleum Corporation’s data showed.

According to the EIA, several factors appear to have contributed to the rise in the US crude oil exports in 2016.

It said increased crude oil imports in 2016 substituted for some domestic crude oil at the US refineries, allowing higher exports despite lower US production and increased refinery runs.

Low tanker rates for most of 2016 helped to narrow the price spread needed to allow for an economically attractive trade between the US and overseas markets.

“With the average daily volume of crude imports more than 12 times the average daily volume of crude exports, many tankers were available for ‘back-haul’ voyages at rates significantly below regular tanker rates, likely further reducing the cost of reaching export markets,” the EIA said.

Meanwhile, Nigeria’s crude oil exports are set to rise to 1.66 million bpd in May, according to a loading programme compiled by Reuters on Tuesday.

The country’s crude oil programme for the month is up from April’s revised loadings and puts Nigeria just above Angola’s planned exports of 1.61 million bpd in May.

While Nigeria had consistently been Africa’s largest oil exporter, its loadings have fallen below those of Angola several times over the past year as it dealt with militant attacks on oil infrastructure in the Niger Delta.

The increase to 54 May cargoes from 52 in April, or 1.61 million bpd, came in part from rising exports of Bonga and Antan, both of which were hit earlier in the year for scheduled maintenance.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

Published

on

Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

Continue Reading

Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

Published

on

Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

Continue Reading

Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

Published

on

Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending