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Nigeria’s Oil Exports to Slip in October

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  • Nigeria’s Oil Exports to Slip in October

Nigeria’s total exports are set to slip in October, possibly to a five-month low, according to loading programmes.

Export plans for most grades were showing levels of roughly 1.72 million bpd, compared with 1.88 million bpd in September, according to a Reuters’ report.

While some cargoes would likely be added, the current plan stands at a five-month low, and was expected to remain slightly below September’s loadings of 1.88 million bpd, the report stated.

August’s exports had been on track to exceed two million bpd, a 17-month high, but the closure of the export pipelines for Bonny Light crude pulled them lower. The final schedule also included about 1.88 million bpd.

Shell’s lifted its latest force majeure declaration on Bonny Light early last week, meaning all the nation’s export grades are again free of restriction.

Nigeria’s oil output has rebounded this year, aided by concerted government efforts to placate militants in the restive Niger Delta region where the bulk of the nation’s crude is produced, but it has struggled to maintain peak output levels.

Theft from the nation’s oil pipelines in the Delta region leads to frequent shutdowns, limiting output. PRODN-NG Additionally, unrest still threatens some oil infrastructure despite the government’s efforts.

Three cargoes of Akpo condensate, with 97,000 bpd, are also set to load in October, compared with four cargoes of 133,000 bpd in September.

It stated that key grades Bonny Light, Brass River and Qua Iboe loading plans were all smaller than the September programmes, and there were no exports planned for Abo, Antan or Pennington.

Forcados exports were scheduled to rise to 256,000 bpd, and Erha also showed an increase.

The Nigerian National Petroleum Corporation raised official selling prices in September for Bonny Light and Qua Iboe crude oil to dated Brent plus 48 cents and 82 cents per barrel respectively.

The August differential for Bonny Light was dated Brent plus three cents, while for Qua Iboe, it was 13 cents per barrel.

Sonangol had allocated all but two of its October loading cargoes, one Dalia and one Saturno. It offered each at premiums of 15 cents versus dated Brent.

The October export plan of 1.7 million bpd was the highest since September 2016.

Sellers are hoping to maintain differentials, which hit three-year highs for certain grades.

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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Economy

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

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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.

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Economy

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

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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.

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

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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.

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