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OPEC’s Newest Member Calls on African Nations to Join Oil Group

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  • OPEC’s Newest Member Calls on African Nations to Join Oil Group

Equatorial Guinea, OPEC’s newest member, called on fellow African producers to band together to protect the value of their oil resources and join the group.

As more discoveries are made across the continent, cooperation among producers is key, the nation’s Minister of Mines, Industry and Energy Gabriel Obiang told a conference in Cape Town. “Have a principle and defend your base,” he said, wryly referencing a strategy of U.S. President Donald Trump.

Equatorial Guinea joined the Organization of Petroleum Exporting Countries last month, making the group the largest it’s ever been. Although small, the country is sub-Saharan Africa’s third-biggest oil producer, after Nigeria and Angola. Like other oil-rich nations, including top exporter Saudi Arabia, Equatorial Guinea is preparing for a world where energy demand veers away from crude.

“If in 10 years, oil becomes a commodity that the developed countries don’t want — they want to focus on just gas, solar — what are the African countries going to do?” Obiang said Tuesday. “It’s very important to know what our brothers, our bigger brothers in the region, what Nigeria is doing, what Algeria is doing” and communicate that throughout the continent, he said.

While the International Energy Agency currently forecasts an increase in global oil consumption over the next two decades, it has outlined alternative scenarios in which fuels such as natural gas could displace about 13.5 million barrels of demand by 2040, while efficiency gains and a move to electric cars could remove millions more. An organization such as OPEC is vital in supporting oil producers as the energy landscape changes, according to Obiang.

OPEC Platform

“African countries that are producing the same as Equatorial Guinea, or even more than Equatorial Guinea, I encourage them to join OPEC because that’s the platform that is definitely going to be fighting for your own resources,” he said.

The country in West Central Africa is pushing to increase its own oil production to 300,000 barrels a day in two years and 500,000 a day in five years, from about 269,000 a day now. It opened a licensing round last year to bring in foreign investors for exploration projects.

“The key thing for us is: to have more production, we have to have more discoveries,” Obiang said.

Winners of the licensing round, including Exxon Mobil Corp. and Ophir Energy Plc, were announced Monday.

Obiang is one of the younger sons of President Teodoro Obiang, the longest-running head of state in Africa. Teodoro Obiang assumed power in 1979 in a military coup that ousted his own uncle, Francisco Macias, who had ruled the country since independence from Spain in 1968.

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 Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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