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Wider Laptops Ban Would Cost Airlines $1 Billion, IATA Head Says

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  • Wider Laptops Ban Would Cost Airlines $1 Billion, IATA Head Says

The widening of a U.S. ban on carrying electronic devices aboard aircraft to include flights from Europe would cost travelers more than $1 billion, the head of the airline industry’s global lobby group said.

Extending the curbs, which currently apply only to some U.S.-bound services from the Middle East and North Africa, would obstruct travel and might not be the best way of countering the threat, International Air Transport Association Chief Executive Officer Alexandre de Juniac said in an interview Wednesday.

“Traveling with your laptop is part of everyday life,” De Juniac told Bloomberg, predicting that further measures will cause “significant” disruption in the trans-Atlantic business market. “We are not sure that this ban is adapted to the threat. We don’t know what is the basis or intelligence that justifies this measure.”

While the Mideast moratorium affects 350 U.S.-bound flights per week, extending it to the 28 European Union states plus Switzerland, Norway and Iceland would impact 390 a day, or more than 2,500 a week, IATA reckons. The measure would cost passengers $655 million in terms of lost productivity, $216 million from longer travel times, and $195 million for the rental of loaner devices on board, it calculates.

Some businesses will also choose to cancel trips rather than hand over laptops loaded with confidential information, according to the industry group, which represents 265 airlines around the world. Carriers themselves would incur costs from departure delays, additional handling of hold luggage and liability for damaged or stolen devices, while traveler numbers, fares and ultimately frequencies could all decline, it says. At the same time, flights may become less safe as more lithium battery-powered are stowed in holds.

U.S. Considers Expanding Airline Laptop Ban Beyond Europe

IATA needs to be told more about U.S. concerns in order to contribute to developing a solution, De Juniac said, adding: “We can provide appropriate advice when it comes to security and protection measures for passengers. What we have said to the U.S. and U.K. authorities and to the Europeans is, please, if you want to take this measure, work very closely with the industry.”

IATA wrote to U.S. Homeland Security Secretary John Kelly and European Transport Commissioner Violeta Bulc on Tuesday expressing “serious concern” regarding an expanded ban and detailing the estimated passenger costs, according to a copy of the letter seen by Bloomberg.

If governments agree that wider curbs are necessary they should consider applying measures to enhance security while avoiding the concentration of devices in holds, the communication says. That could include the increased use of explosives detectors and sniffer dogs, closer visual scrutiny of devices, the deployment of behavioral detection officers, and the implementation of trusted-traveler programs to help identify lower-risk passengers, it says.

While there has been some U.S. consultation with airlines that has allowed the industry to at least express its concerns — in contrast to the “badly implemented” Mideast ban — more detail needs to be provided, De Juniac said.

The comments from the IATA chief, who was previously CEO of Air France-KLM Group, come as U.S. and European Union officials prepare to meet in Brussels today to discuss the widening of the ban, which also covers tablets and games consoles while excluding smaller devices such as phones. The EU has no information on the reasons for the move, officials have said.

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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Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

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The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

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Oil Prices Hold Steady as U.S. Demand Signals Strengthening

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Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

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Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

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Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.

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