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FG’s Auto Policy Revives 29 Licenced Assembly Plants

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Motor Insurance
  • FG’s Auto Policy Revives 29 Licenced Assembly Plants

A statement by the Strategy and Communications Adviser to Minister of Industry, Trade and Investment, Bisi Daniels, said the policy had resulted in 29 out of the 54 licensed assembly plants coming on stream as at February, 2018.

He also disclosed that a total installed capacity of 419,190 units and a total actual production of 8,628 units had been achieved under the automotive policy.

The Ministry of Industry and Trade said before the introduction of the policy, three out of the five assembly plants established in the 1970s had become moribund.

It said the objective of the policy was to bring back Completely-Knocked-Down (CKD) automotive assembly and develop local content, thereby turning Nigeria into a vehicle manufacturing country.

In addition, the policy is expected to create employment, acquire technology and reduce the pressure on the country’s balance of payment.

“The achievements made so far confirm the high potentials of the policy to grow the automotive sector,” Minister of Industry, Trade and Investment Dr. Okey Enelamah, said.

Over 14 existing assembly plants including Peugeot Automobile Nigeria Limited (PAN), Innoson Vehicle Manufacturing Co. (IVM), Anambra Motor Manufacturing Company (ANAMMCO) and Leyland-Busan have started assembling new products since 2014.

Also, Dangote Sinotruk West Africa LTD, a Joint Venture with total investment of $100 million for truck assembly plans to assemble and produce full range of commercial vehicles covering heavy duty truck, medium truck, light truck and semi-trailers, among others.

It aims to meet an expected current demand of these segments of automobiles required for logistics, construction, food and beverage industries in Nigeria as the government focuses on boosting economic development across the country.

Dangote Sinotruk has an installed capacity to assemble and produce 10,000 trucks annually and will create 3000 jobs across Nigeria.

The effect of the revival in production has also impacted ANAMMCO which has recalled 200 workers it laid off when it downsized its production staff from 2011 due to the unfavourable conditions.

The company is currently waxing stronger and has received several proposals from Original Equipment Manufacturers interested in establishing local assembly presence.

The automotive policy has also generated interest outside the country.

Recently, a delegation of international automotive investors, which comprises original equipment manufacturers and other stakeholders visited the country.

The delegation sought to gain insight into the business opportunities and investment environment in the Nigerian automotive sector and assist in the shaping of national and state policy to support industry overall and domesticated manufacturing for the automotive sector.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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