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Freighting of Cargoes Rises by 10%, Says NAHCO Chief

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  • Freighting of Cargoes Rises by 10%, Says NAHCO Chief

Freighting of agricultural and perishable cargoes and other non-consumable products at the nation’s international airports has increased by 10 per cent, Nigerian Aviation Handling Company (NAHCO) Chief Commercial Officer Seyi Adewale has said.

He said the air freight of such cargoes increased from about two per cent to 12.5 per cent in the last few years due to the export promotion policy.

He listed the perishable cargoes to include tomatoes, vegetable and yams.Other non-consumable cargoes include native fabrics, hair extension and donkey skins.

Adewale said the rise in cargo export to the United States, European, Asian,Middle East and African countries in the last few years has forced the cargo handling company to upgrade the security and safety standards of its cargo warehouse.

In an interview in Lagos, Adewale said the firm has stepped up the level of security and safety of its facilities because airlines that ferry air cargo are concerned about the level of compliance of air cargo in line with prescribed global standards.

He said: “Perishables cargo export has grown from as low as two per cent to about 12 per cent in the last few years, representing over 10 per cent increase. Since we handle about 80 per cent of the cargo in and out of the country, this for us is large.”

According to him, most of the shipments go to the US, which constitutes the highest percentage for export.

Giving a breakdown, he said 38 per cent of exports coming through his company’s warehouse goes to US, while 34 per cent go to Europe, which includes the United Kingdom.

Also, while 15 per cent of the cargo go to Africa, nine per cent go to Asia, leaving only two per cent to the Middle East.

Adewale added that perishables like tomatoes, fruit and vegetables amongst others have grown and are still growing.

“People are now exporting yams. They also export dry fish and general goods such as non-consumables like cloths, native fabrics, hair extensions and donkey skins,” he said.

Besides stepping up security and safety of its facilities, Adewale said NAHCO was subjected to a twice- monthly technical audit by International Civil Aviation Organisation (ICAO), United States Federal Aviation Administration (FAA) and the Nigerian Civil Aviation Authority (NCAA).

The audit by the three bodies , he said, was to ensure that any cargo that goes into any aircraft was safe, not harmful and illegal.

Adewale said: “One of the challenges of exportation in Nigeria is the requirements for us to maintain a world class export warehouse.

“We have two X-ray machines. To service these machines on a quarterly basis cost millions of naira and that is if there are no major repairs to be carried out.

“Airlines are more concerned about exports because whatever they are going to put on their aircraft must be right in terms of safety and security. Airlines are conscious about the export facilities, export processes and security.”

According to him, this puts the company on the edge, with at least, two audits monthly by ICAO and other relevant agencies.

He said another challenge is that because the business is growing and the company need to expand, the little money it makes is ploughed back into the business.

“We recently extended our acceptance section to another product packaging section so that we decongest the export warehouse because of the capacity,” Adewale added.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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