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Cocoa Jumps as Unrest Continues in Top Producer Ivory Coast

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Cocoa
  • Cocoa Jumps as Unrest Continues in Top Producer Ivory Coast

Cocoa extended its biggest weekly gain in five years after talks between army commanders and mutinous soldiers in the world’s top producer Ivory Coast failed over the weekend.

The beans jumped as much as 4.4 percent in London as Ivory Coast’s military was said to have given soldiers an ultimatum on Sunday to drop their pay demands and end a revolt. Special forces will take action against the soldiers should the talks fail, a person familiar with the matter said.

There were reports of shooting early Monday at the main army barracks in Abidjan, the commercial capital, and the country’s second-biggest city of Bouake.

“There has been a slight pick-up in the price in the last few days and that may actually reflect people getting a bit nervous,” Edward George, head of research at Ecobank Transnational Inc., “Bouake is one of the centers of the cocoa trade so obviously people are worried.”

Cocoa for delivery in July rose 1.8 percent to 1,597 pounds ($2,065) a metric ton by 12:01 p.m. on ICE Futures Europe in London. Prices reached the highest since April 7, after rallying 7.4 percent last week, the biggest increase for the most-active contract since January 2012.

The unrest was sparked by an announcement from President Alassane Ouattara on Thursday that the government reached a compromise with troops who revolted earlier this year over unpaid bonuses. The nation last month revised its budget amid lower prices for cocoa, its main export, limiting its ability to pay soldiers.

Cocoa has fallen 27 percent in the past 12 months on expectations of bumper harvests in West Africa including record supplies from Ivory Coast. Money managers have held a net-bearish position in cocoa futures and options in New York since November though trimmed the wager last week. Any bullish news could prompt speculators to make purchases to cover their short positions, according to Marex Spectron Group.

“The dangerous thing is, there is a very big speculative short in New York and the situation in Ivory Coast — that’s a catalyst in the market to trigger short-covering,” Jonathan Parkman, the co-head of agriculture at Marex in London, said by phone. “It’s a political worry. Do I actually think it will restrict cocoa supplies? I seriously doubt that.”

All import and export operations at Ivory Coast’s biggest port in Abidjan are continuing as usual, spokesman Alexis Guie said by phone on Monday.

Soldiers have wounded civilians and blocked roads to the main border with Burkina Faso, while citizens opposed to the rebellion have organized protests across Ivory Coast. Special forces troops are moving toward Bouake in the center of the country, according to a person familiar with the matter, who asked not to be identified because he’s not authorized to speak about it.

Meanwhile, in Cameroon, another top producer, stevedores called off a strike on Sunday after 200 members downed tools on May 12, stalling exports of cocoa and coffee.

“The thing is that there is ample cocoa out there,” Ecobank’s George said. “We’ve got a very good supply coming in in Ghana, so it’s going to take something pretty spectacular to turn the market.”

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.

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Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Crude oil

Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Energy

NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade

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Mele Kyari - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.

Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.

Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.

In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.

Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.

He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.

Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.

In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.

Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.

The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.

As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.

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