- Angola Oil Minister Says Nation Needs Crude to Rebound to $60
Angola’s Petroleum Minister Jose Maria Botelho de Vasconcelos said it’s essential for the southern African nation’s economy that oil prices rebound to $60 a barrel this year.
“That would be extremely important,” Botelho de Vasconcelos said Monday in an interview in the country’s capital Luanda. “We’ve been getting signs from the market that prices could reach $60 by the end of the year.”
Angola, which depends on crude shipments for 97 percent of its exports, joined fellow OPEC members nine months ago in curbing output in a bid to bolster prices. President-elect Joao Lourenco, who takes over next month as the 38-year rule of Jose Eduardo dos Santos comes to an end, must revive the economy of Africa’s second-largest oil producer, which has stagnated following the slump in crude since mid-2014.
Brent crude, the benchmark for Angola, traded at $51.46 as of 4:07 p.m. in London on Wednesday. That compares with the $82 Angola needs to balance its budget this year, according to April estimates by Fitch Ratings Ltd.
The oil minister said it’s too soon to say whether the Organization of Petroleum Exporting Countries should extend production cuts beyond next March.
“November will be the best time to analyze whether its best to extend the cuts or not,” he said. OPEC is due to hold a ministerial meeting on Nov. 30.
Angola emerged from a civil war in 2002 to become of one the world’s fastest growing economies, mostly because of oil. Yet, the days of sky-high growth in sub-Saharan Africa’s third-largest economy have come to an end and a third of the population still lives on less than $2 a day. Lourenco, whose ruling Popular Movement for the Liberation of Angola Party won elections earlier this month, has vowed to push hard to diversify the economy.
“Oil helped relaunch the diversification of the economy but it can’t continue to have so much weight in the economy,” Botelho de Vasconcelos said.
Angola was the world’s fourth-biggest coffee producer and a top exporter of sugarcane, bananas, sisal and cotton before a 27-year civil war after independence from Portugal in 1975 led to a mass exodus of farmers to the cities. Today, the country has the world’s most concentrated economy in terms of exports after Iraq, according to the United Nations Development Programme,
Angola’s political and tax environment is discouraging investment that might counter declining oil output, analysts at Tudor Pickering Holt said this month. International Energy Agency figures show total Angolan output slipped to 1.65 million barrels a day in July, meaning the nation has exceeded its promised cuts under the OPEC deal.
The minister said foreign oil companies continue to invest in Angola and tenders for onshore blocks that were suspended earlier this year will be relaunched after a new government is appointed next month. A tender for oil blocks in the Namibe Basin off southern Angola may also be opened next year to offset declines at older fields, he said.
“It’s about 10 offshore blocks, although there is nothing concrete at the moment,” said Botelho de Vasconcelos.
His ministry has worked with oil companies to cut production costs in Angola to an average of about $10-12 a barrel from about $15-20 three years ago, he said. Measures include giving producers greater flexibility to explore marginal fields that would previously have required separate tenders.
“We’ve been getting positive feedback from oil companies,” he said. “Things have slowed down but they have continued to show an interest in staying in the country.”
The 67-year-old, who has been oil minister since 2008 after serving a first term in the post from 1999 to 2002, declined to comment on his future plans at the helm of the ministry.
“I would rather wait for a new government to be appointed,” he said. “But, as you know, we all have several stages during our lifetime and there is a period in which a new generation should step forward.”
Brent Crude Oil Approaches $70 Per Barrel on Friday
Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension
Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.
Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.
Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.
While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.
According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.
“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”
Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.
“The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.
“I do believe we’re headed for a much healthier supply and demand environment” she said.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
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