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US Reduces Nigeria’s Oil Imports

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  • US Reduces Nigeria’s Oil Imports

The U.S has reduced Nigeria’s crude oil import from 4.87 million barrel per day imported in January to 539,000 bpd in February.

The report showed the US imports of Nigerian crude oil dropped to a four-year low in February.

The US imported 5.18 million bpd in December, down from 10.03 million bpd in January 2018, the Energy Information Administration reported on Friday.

The total import of Nigerian crude oil declined by 48.87 million barrels or 43 per cent in 2018.

“The US imports of Nigerian crude fell to 64.06 million barrels last year from a five-year high of 112.92 million barrels in 2017.

“The EIA data showed that the country imported 75.81 million barrels of Nigerian oil in 2016, up from 19.85 million barrels in 2015.

“US imports of Nigerian crude fell from 148.48 million barrels in 2012 to 87.40 million barrels in 2013 on the back of shale oil boom.

“Light sweet Nigerian crude is very similar to the light oil produced in US shale. As US shale production has grown, the appetite for Nigerian crude in the US has dropped dramatically.

“In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in US imports of its crude to 21.24 million barrels.

“For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 as well as June 2015, according to the EIA data.

“In 2010, the US bought as much as 358.92 million barrels from Nigeria, but slashed its imports to 280.08 million barrels in 2011.

“With the sharp increase in its production, the US oil exports averaged 1.9 million bpd in 2018, about twice the amount that was exported in 2017, according to the EIA.

“Crude oil exports from the US to the United Kingdom overtook supplies from other countries including Nigeria for the first time since such shipments began in 2015.

“In January this year, the US supplied the equivalent of almost one in every four barrels of crude processed by UK oil refineries, or 264,000 bpd, according to the Financial Times.

“That level was more than Norway, Russia, Nigeria or Algeria, according to data from the cargo-tracking company Kpler, which have all been major suppliers to the UK in recent years.

“South Korea overtook China as the number-two destination for US crude behind Canada in 2018, as shipments to South Korea soared to a record high of 558,000 bpd in December, according to the EIA.”

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.

Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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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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