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Nigeria’s Oil Sales Suffer, US Exports Rise

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Heritage Oil - Investors King
  • Nigeria’s Oil Sales Suffer, US Exports Rise

More than two dozen Nigerian crude oil cargoes were left unsold on Monday amid a supply glut of light sweet crude in the market.

Reuters reported that tenders to buy oil from companies in India and Indonesia helped to absorb some excess, but there were roughly 30 unsold Nigerian cargoes and a handful from Angola.

While Qua Iboe, Nigeria’s largest export grade, was offered at dated Brent plus $1.30, buyers said traded levels were likely to be lower because of an overall excess of light sweet oil.

There were also at least five cargoes of Forcados left, though several were partial cargoes.

Bonny Light, which had struggled with loading delays owing to pipeline issues, was offered at a premium of closer to $1 a barrel above dated Brent.

There were several cargoes of Agbami and Bonga left.

Meanwhile, US crude oil is flooding into Asia and may continue to do so as the arbitrage window that was initially created by Hurricane Harvey remains open, even though the disruption from the costliest storm to hit the Gulf of Mexico has faded, a columnist for Reuters, Clyde Russell, wrote on Monday.

A record amount of US crude is scheduled to arrive in Asia in November, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.

The data show 19.7 million barrels of US oil is due to arrive across Asia in November, equivalent to about 657,000 barrels per day.

This is more than a 50 per cent jump on the 427,000 bpd that was offloaded in Asia in October, and also above the previous record-high month for US crude shipments to Asia of 541,000 bpd from June.

The Energy Information Administration, the statistics arm of the US Energy Department, said the crude oil exports in the first half of 2017 increased by more than 300,000 bpd from the first half of 2016, reaching a record high of 900,000 bpd.

It said following the removal of restrictions on exporting US crude oil in December 2015, total volumes of crude oil exports and the number of destinations for those exports both increased. The US exported crude oil to 27 countries in the first half of 2017 compared with 19 countries in the first half of 2016.

Canada remained the largest recipient of US crude oil exports at 307,000 bpd, but imported an average of 63,000 bpd less compared with the first half of 2016. China increased its crude imports from the US by 178,000 bpd and became the second largest importer of US crude oil, averaging 186,000 bpd in the first half of the year.

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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Oil

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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Economy

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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