- U.S Existing Home Sales Decline to 11-Month Low
The sales of previously owned homes in the United States declined in July to the lowest in almost a year.
Contract closings plunged 1.3 percent to a 5.44m annual rate in July, according to the National Association of Realtors. This is below 5.55m expected by most analysts surveyed.
Experts believed the limited number of available properties for sale is the biggest housing market’s hurdle and keeps home-price growth above wage gains. Therefore, preventing some first-time buyers from becoming homeowners.
“Just not enough homes are showing up — an inventory shortage,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. “Demand remains strong but the inventory shortage is the choke point.”
That’s keeping prices above wage growth. “There’s a continuing misalignment between home price growth and people’s income or wage growth,” he said.
Also, the reports showed the July’s sales number was mainly affected by the 5.3 percent decline recorded in the Midwest and a 14.5 percent plunge from Northeast.
In the Midwest, purchases drop to a 5-month low of 1.25 million at an annualized rate.
Oil Dips from Near Three-year High
Oil prices dipped modestly on Thursday but still held close to their highest in almost three years, supported by drawdowns in U.S. inventories and accelerating German economic activity.
Doubts about the future of the 2015 Iran nuclear deal that could end U.S. sanctions on Iranian crude exports also helped prices.
Brent dipped 18 cents, or 0.24%, to $75.01 a barrel by 1055 GMT, after earlier rising to $75.78. U.S. crude slipped 17 cents, or 0.23%, to $72.91 a barrel, after hitting a session high of $73.61 earlier.
Both benchmarks had hit their highest since October 2018 on Wednesday before slightly paring back gains.
“The narrative is unchanged: the bounce in Western-world commuting and leisure activity fuels oil demand and drains oil supplies,” Norbert Rücker, head of economics at Julius Baer, wrote in a note.
Further stoking expectations of a European fuel demand recovery, data from Germany showed the largest upward leap in retail conditions since German reunification more than three decades ago.
Across the Atlantic, U.S. crude inventories dropped to their lowest since March 2020, official data showed. U.S. gasoline stocks also posted a surprise draw.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+ that meets on July 1, have been discussing a further unwinding of last year’s record output cuts from August but no decision has been made, two OPEC+ sources said on Tuesday.
“Given the good sentiment and robust demand, OPEC+ is likely to find it easy next week to announce a further increase in production, at least for August, without jeopardising the upswing enjoyed by the oil price,” Commerzbank analysts wrote.
They said “the currently positive general tenor on the oil market” was driving prices up.
Brent has gained more than 45% this year on the OPEC+ supply cuts and recovering demand. Some industry executives have talked of crude returning to $100 for the first time since 2014.
Iran said on Wednesday the United States had agreed to remove all sanctions on Iran’s oil and shipping but Washington said “nothing is agreed until everything is agreed” in talks to revive the 2015 Iran nuclear deal.
South Sudan Launches First-Ever Oil and Gas Licensing Round
South Sudan’s Ministry of Petroleum (MoP) officially launched the country’s first-ever oil and gas licensing round in Juba on Wednesday; Hosted by the MoP and attended by industry executives and international stakeholders, the event signifies an historic moment in the country’s budding oil and gas sector; The launch precedes the country’s highly anticipated national energy conference, South Sudan Oil & Power 2021, organized by Energy, Capital & Power and taking place at the Crown Hotel in Juba on the 29th-30th June.
South Sudan’s Ministry of Petroleum (MoP) officially launched the country’s first-ever oil and gas licensing round in an inaugural event on Wednesday in Juba. Focused on accelerating exploration and production at new and existing blocks, and promoting the country as a competitive investment destination, the event signified an historic moment in the country’s competitive oil and gas sector.
The event was officially launched by Hon. Puot Kang Chol, Minister of Petroleum, where presentations were given by Hon. Awow Daniel Chuang, Undersecretary, MoP and Hon. Athian Ding Athian, Minister of Finance and Economic Planning, with closing remarks by H.E. James Wani Igga, Vice-President and VP of the Economic Cluster, TGNU. With emphasis placed on political improvements, the improved legal framework, and the ongoing acquisition of new data, the launch has reaffirmed the country’s commitment to advancing the sector.
“Oil licensing is a proof of stability and progress in South Sudan. These blocks are part of a vision for lasting peace in the country and we want to open up the energy sector for investment. The Ministry of Petroleum has identified new exploration blocks with potential hydrocarbons for investors, operators, and other parties. We are inviting genuine investors and as mentioned in our Petroleum Act, we will try our best to be transparent,” stated Hon. Puot Kuang Chol.
“It is high time for us to help maximize the natural resources we have, and I applaud the MoP for what they are doing. The oil industry has had its ups and downs, but it is about time that these resources benefit the community, and everyone gets their rightful entitlement of the development that is taking place in South Sudan,” stated Hon.. Athian Ding Athian.
The newly launched licensing round aims to attract international investors and partners to help expand South Sudan’s exploration initiatives. Built against a backdrop of peace and stability, the new licensing round aims to attract investors, while ensuring sustainable developments and community benefits.
“Certainly, one can say with confidence that South Sudan is doing well in maintaining peace and implementing peace agreements. For the first time we can really promote investment. The country needs to rigorously enforce transparency and good governance. We need accountability to improve. I am glad that with this new licensing round, the whole country will benefit,” stated H.E. James Wani Igga.
Additionally, the launch meticulously outlined the licensing process and schedule, providing insight into new and available blocks, technical capabilities and data. By detailing crucial analytical data and information to assist operators and investors, the launch emphasized that South Sudan is officially open for business, and accordingly, is welcoming investors to its competitive sector.
“Most of the areas being licensed had previously not been explored properly in terms of seismic data due to complications from the war. In 2019, we contracted PETROTECH to help with the data. The absence of data previously made it difficult to conduct licensing rounds, however, this licensing round today allows South Sudan to conduct a transparent tendering process with trustworthy data that is available,” stated Hon. Awow Daniel Chuang.
According to the MoP, the Ministry will use stringent criteria in its facilitation of the bid evaluation and investor selection process. With the offered blocks falling between longitudes 25 and 36 and between latitudes 4 and 11, and the size of blocks ranging between 4,000 and 25,000km², the licensing round is expected to be highly competitive. Additionally, the MoP is emphasizing the role of Nilepet in facilitating growth across the industry.
“If you look at the producing blocks today, the percentage of Nilepet has gone to 10% equity. We want investors but we also want to promote the capacity of Nilepet as the national oil company,” continued Hon. Puot Kang Chol.
The newly launched licensing round will be expanded on at the South Sudan Oil & Power (SSOP) 2021 conference, organized by Energy Capital & Power and endorsed by the Ministry of Petroleum. The Ministry will unpack the exploration of new blocks, existing blocks and will explain how it will further explore already producing areas.
Taking place at the Crown Hotel in Juba on the 29th-30th June, SSOP 2021 is expected to drive investment, promote engagement, and accelerate growth within South Sudan’s oil and gas sector.
Brent Crude Oil Crosses $75 Per Barrel as Global Demand Recovers
Crude oil prices sustained bullish runs amid rising demand for global oil and likely delay in Iranian crude supply to global oil market.
Brent crude oil, global benchmark for Nigerian oil, rose above $75 a barrel for the first time since 2019 on Tuesday as global investors remained bullish across the board.
Brent crude rose 26 cents or 0.4 percent to $75.16 a barrel as of 7 am Nigerian time on Tuesday.
The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs.
“The market sentiment stays strong with improved outlook for global demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that a rally in Asian stock markets is also helping boost risk appetite among investors.
Global shares extended their recovery on Tuesday, with Asian markets bouncing from four-weeks lows as investor focus on economic growth partly offset worries about the U.S. Federal Reserve raising rates sooner than expected.
BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.
Investors are looking to weekly U.S. inventory data as crude oil stockpiles have fallen for four weeks, said Toshitaka Tazawa, analyst at commodities broker Fujitomi Co.
U.S. crude stocks were expected to drop for the fifth consecutive week, while distillate and gasoline were seen rising last week, a preliminary Reuters poll showed on Monday.
“The oil prices are expected to hold a firm tone amid expectations that fuel demand will pick up quickly along with economic recovery in Europe and the United States,” Tazawa said.
The price gap between the world’s two most actively traded oil contracts narrowed to its lowest in more than seven months, demonstrating that U.S. oil output is still in the COVID-19 doldrums with the market likely to remain undersupplied.
Negotiations to revive the Iran nuclear deal took a pause on Sunday after hardline judge Ebrahim Raisi won the country’s presidential election.
Raisi on Monday backed talks between Iran and six world powers to revive a 2015 nuclear deal but flatly rejected meeting U.S. President Joe Biden, even if Washington removed all sanctions.
“The lower probability of Iranian crude oil returning to the market due to the new hardline president is also supporting the market,” Fujitomi’s Tazawa said.
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