Economy

Oil Falls for Third Day over Rising US Shale Output

Published

7 years ago

November 15, 2017

Oil Falls for Third Day over Rising US Shale Output

Crude oil prices dropped for a third day from close to two-year high yesterday as rising United States output hampers efforts by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC to cut output and rebalance the oil market.

Traders and investors have reportedly questioned how much the prospect of further rises in United State output might overshadow some of the optimism that OPEC-led production cuts would tighten the balance between crude supply and demand.

The US shale output for December is set to rise for the 12th straight month and Fitch Ratings said in its 2018 oil outlook that oil prices above $60 per barrel may not be sustained.
Brent crude futures were last down at $62.82 a barrel yesterday, while US West Texas Intermediate (WTI) futures fell to $56.49.

Both benchmarks early in the previous week hit high last seen in 2015, but Reuters quoted traders as saying that the market had lost some momentum since then.

Traders said they were cautious about betting on further price rises.

This sentiment comes in part on the back of rising U.S. oil output C-OUT-T-EIA, which has grown by more than 14 percent since mid-2016 to a record 9.62 million barrels per day (bpd).
The US government said on Monday that the US shale production in December would rise for a 12th consecutive month, increasing by 80,000 bpd.

Fitch Ratings said in its 2018 oil outlook that it assumed 2018 “average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained”.

So far, in 2017, Brent has averaged $54.5 per barrel.

Despite the cautious sentiment, traders said oil prices were unlikely to fall far, largely due to supply restrictions led by the OPEC and Russia, which have helped reduce excess stockpiles.

The International Energy Agency (IEA) on Tuesday delivered a more cautious outlook for oil demand.

In a monthly report, the Paris-based agency cut its oil demand forecast by 100,000 bpd for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.

The IEA said warmer temperatures could cut consumption, while sharply rising production from outside OPEC might mean the global market tilts back into surplus in the first half of 2018.

United Arab Emirates’ minister for energy Suhail al-Mazroui had said he expected OPEC and non-OPEC countries to extend global supply cuts at the November 30, 2017 meeting.

The minister said at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), that his prediction was that OPEC would continue to do what it would take to rebalance the market.
He added that while he had not heard any OPEC members discussing the possibility of not extending the deal, the time and duration of an extension was still to be decided.

OPEC members were reportedly forming a consensus around extending by nine months their production cuts deal with other crude exporters.

An extension would prolong the agreement among OPEC, Russia and other oil-producing nations to keep 1.8 million barrels a day off the market through the whole of next year.

The exporters reached the deal last December and had already extended the agreement once through March 2018.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

FIRS VAT Revenue Surges to N1.56 Trillion in Q2 2024 Amid Economic Struggles

Published

1 day ago

September 10, 2024

Samed Olukoya

The Federal Inland Revenue Service (FIRS) generated N1.56 trillion in Value Added Tax (VAT) in the second quarter (Q2) of 2024, according to the latest report from the National Bureau of Statistics (NBS).

This represents an increase of 9.11% compared to the N1.43 trillion reported in the first quarter of 2024.

A breakdown of the report showed that local VAT payments accounted for N792.58 billion of the total amount generated, while foreign VAT payments stood at N395.74 billion, and import VAT contributed N372.95 billion.

A quarterly analysis of the report revealed that human health and social work activities recorded the highest growth rate with 98.44%. This was followed by agriculture, forestry, and fishing with 70.26%, and water supply, sewerage, waste management, and remediation activities with 59.75%.

On the other hand, activities of households as employers and undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –46.84%, followed by real estate activities with –42.59%.

Sectoral analysis showed that the manufacturing sector contributed the most at 11.78%. Information and communication and mining and quarrying contributed 9.02% and 8.79%, respectively.

Nevertheless, activities of households as employers and undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organizations and bodies with 0.01%, and water supply, sewerage, waste management, and remediation activities and real estate services with 0.04% each.

On a year-on-year basis, VAT collections grew by 99.82% from Q2 2023 despite ongoing economic challenges.

Nigeria’s inflation rate remains well above 30 percent, while new job creation is almost nonexistent.

Other key economic factors, such as investor sentiment, the purchasing managers’ index, and consumer spending, remain weak amid intermittent protests by citizens demanding improvements in quality of life.

Economy

Nigeria Sees 9.11% Increase in VAT Revenue, Generating N1.56 Trillion in Q2 2024

Published

2 days ago

September 9, 2024

Investors King

The federal government in the second quarter of 2024 generated a total of N1.56 trillion from Value Added Tax. This is a 9.11 percent increase from the N1.43 trillion in Q1 2024.

According to the National Bureau of Statistics report, local payments recorded were N792.58 billion, foreign VAT payments were N395.74 billion, while import VAT contributed N372.95 billion in Q2 2024.

“On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and water supply, sewerage, waste management and remediation activities with 59.75%,” NBS reported.

“On the other hand, activities of households as employers, undifferentiated goods and services producing activities of households for own use had the lowest growth rate with 46.84%, followed by Real estate activities with 42.59%.

“In terms of sectoral contributions, the top three largest shares in Q2 2024 were
manufacturing with 11.78%; information and communication with 9.02%; and Mining and quarrying with 8.79%.

“Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organisations and bodies with 0.01%; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04% each.

“However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82% from Q2 2023.”

Economy

Finance Minister Denies VAT Hike, Confirms Rate Remains at 7.5%

Published

2 days ago

September 9, 2024

Investors King

Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, on Monday, debunked reports doing the rounds that the rate for Value-Added Tax (VAT) has been upwardly adjusted to 10% from 7.5%.

The Minister, in a statement signed by him, affirmed that VAT rate as contained in relevant tax laws and chargeable on goods and services remains 7.5%.

“The current VAT rate is 7.5% and this is what government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.

“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of government.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses to flourish.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” Edun said