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Nigeria, Saudi Record Biggest Increase in Oil Output

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  • Nigeria, Saudi Record Biggest Increase in Oil Output

Crude oil production in Nigeria rose by 88,700 barrels per day last month, the second biggest increase among its peers in the Organisation of Petroleum Exporting Countries.

But the fresh threat by Niger Delta militants to attack some oil and gas facilities in the region may pose a risk to the nation’s oil production.

OPEC, in its Monthly Oil Market Report for January released on Friday, put Nigeria’s output at 1.861 million bpd for December, from 1.785 million bpd in the previous month, according to secondary sources.

The 14-member oil group uses secondary sources to monitor its oil output, but also publishes a table of figures submitted by its member countries.

Based on direct communication, the nation’s output stood at 1.636 million barrels in December, up from 1.547 million bpd in November, said the report.

Saudi Arabia, the largest producer in the group, recorded the biggest increase in December as it produced 9.98 million bpd, up from 9.89 million bpd in the previous month.

According to the secondary sources, the total OPEC crude oil production averaged 32.42 million bpd in December, a minor increase of 42,000 bpd over the previous month.

“Crude oil output increased in Nigeria, Angola and Algeria, while production declined by 80,000 bpd month-on-month in Venezuela,” the group said in the report.

In Africa, production growth of 50,000 bpd – primarily from Ghana and Congo – is expected for 2018, to average 1.90 million bpd, according to the report.

After a year of ceasefire, militants under the aegis of the Niger Delta Avengers on Wednesday threatened to attack some offshore oil and gas facilities in the oil-rich region in a few days’ time.

In 2016, the nation saw a resurgence of militant attacks on oil and gas facilities in the Niger Delta, causing oil production to plummet to near 30-year lows of around 1.6 million bpd in August.

“This round of attacks will be the most deadly and will be targeting the deep sea operations of the multinationals,” the group said in a statement on its website.

Attacks on pipelines and other facilities in the Niger Delta in 2016 cut the nation’s crude production from a peak of 2.2 million barrels per day to near one million bpd – the lowest level in at least 30 years.

That, combined with low oil prices, pushed the country into its first recession in a quarter of a century – crude sales make up two-thirds of government revenue and most of its foreign exchange.

The militants agreed to a ceasefire in August 2016 – a development that helped pull Nigeria out of recession in the second quarter of last year. But they called off the truce in November last year.

Meanwhile, unsold barrels of crudes from West Africa could put pressure on the premiums of Malaysian crude cargoes for March loading, traders said, according to Platts.

Weaker demand, particularly from independent refineries in China, for February-loading Angolan and Nigerian grades had resulted in an overhang, traders said.

Traders indicated that these grades were now looking for home elsewhere in Asia, competing with other Asia Pacific crudes such as Malaysian crudes.

“West African overhang is more than 10 millions … [There is] no [place] to go,” a Southeast Asian crude trader said.

Another trader noted that the weakening tanker freight rates could mean that Asian buyers might consider the grades instead of Asian regional crudes when they would make their purchases this month.

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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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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