Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
Oil and Gas Companies in Nigeria
Nigeria is an oil reach nation with several oil and gas companies operating in Africa’s largest economy. However, only ten oil and gas companies are listed on the Nigerian Exchange Limited (NGX).
Before we discuss in detail each of the listed oil and gas companies in Nigeria. A short background on Africa’s largest economy will help throw more light on the significance of the oil and gas companies or the entire oil sector to the Nigerian economy.
Nigeria is a petrol-dollar economy, which means Africa’s most populous nation, sells crude oil and use its proceed to service the economy. In fact, the Nigerian Naira is backed by crude oil like Canadian Dollar and other commodity-dependent economies.
But because the Central Bank of Nigeria (CBN) pegged the Naira against its global counterparts, the local currency does not reflect succinctly the fluctuation in global oil prices like other crude oil-dependent currencies.
Since global oil prices rebounded with the gradual reopening of economies, the oil and gas companies in Nigeria have also rebounded from the 2020 record low of $15 per barrel. The oil and gas sector has gained 62.76 percent from the year to date, according to the NGX Oil and Gas Index.
The index gauge price movements in 10 listed oil and gas companies in Nigeria. However, there are several oil and gas companies in Nigeria not listed on the Nigerian Exchange Limited.
Oil and Gas Companies Listed on the Nigerian Exchange Limited (NGX)
|Company||Ticker||Sector||Date Listed||Date Incorporated|
|ARDOVA PLC [CG+]||ARDOVA||OIL AND GAS||–||November 12, 1964|
|CAPITAL OIL PLC [MRF]||CAPOIL||OIL AND GAS||–||August 29, 1985|
|CONOIL PLC||CONOIL||OIL AND GAS||–||June 30, 1970|
|ETERNA PLC.||ETERNA||OIL AND GAS||–||January 13, 1989|
|JAPAUL GOLD & VENTURES PLC||JAPAULGOLD||OIL AND GAS||August 10, 2005||June 29, 1994|
|MRS OIL NIGERIA PLC.||MRS||OIL AND GAS||–||August 12, 1969|
|OANDO PLC [MRF]||OANDO||OIL AND GAS||February 24, 1992||August 25, 1969|
|RAK UNITY PET. COMP. PLC. [MRF]||RAKUNITY||OIL AND GAS||–||December 20, 1982|
|SEPLAT ENERGY PLC [CG+]||SEPLAT||OIL AND GAS||–||June 17, 2009|
|TOTALENERGIES MARKETING NIGERIA PLC||TOTAL||OIL AND GAS||–||January 6, 1956|
Oil Prices Extend Gains on Friday After Saudis Dismiss Supply Concerns
Oil prices extended gains on Friday after Prince Abdulaziz bin Salman, Saudi Energy Minister dismissed calls for more crude oil supply on Thursday.
Brent crude oil, against which Nigerian oil is priced, rose to $84.92 per barrel at around 8:31 am Nigerian time. The U.S West Texas Intermediate crude oil also responded positively to the comment, rising to $81.56 per barrel on Friday.
“What we see in the oil market today is an incremental (price) increase of 29%, vis-à-vis 500% increases in (natural) gas prices, 300% increases in coal prices, 200% increases in NGLs (natural gas liquids) ….”
He further stated that the Organization of the Petroleum Exporting Countries and allies led by Russia, have done a “remarkable” job acting as “so-called regulator of the oil market,” he said.
“Gas markets, coal markets, other sources of energy need a regulator. This situation is telling us that people need to copy and paste what OPEC+ has done and what it has achieved.”
Prince Abdulaziz explained that OPEC plus will add 400,000 barrels per day in November and do the same in December and subsequent months. The increase will be gradual he said.
“We want to make sure that we reduce those excess capacities that we have developed as a result of COVID,” he said, adding that OPEC+ wanted to do it “in a gradual, phased-in approach”.
Crude Oil Trading Near $85 a Barrel as Energy Crisis Grips Major Economies
Oil prices rose more than $2 on Monday, extending gains as an energy crisis grips major economies amid a pick-up in economic activity and restrained supplies from major producers.
Brent crude was up $2.17, or 2.6%, at $84.56 a barrel by 1136 GMT, its highest since October 2018.
U.S. West Texas Intermediate (WTI) crude rose $2.67, or 3.4%, to $82.02 for its highest since late 2014.
“Oil prices are likely to continue climbing in the short term,” said Commerzbank analyst Carsten Fritsch.
Prices have risen as more vaccinated populations are brought out of coronavirus lockdowns, supporting a revival in economic activity, with Brent advancing for five weeks and U.S. crude for seven.
The pace of economic recovery combined with cold weather have increased the demand for energy, while pressure on governments to accelerate the transition to cleaner energy have slowed investment in oil projects to boost supplies.
World leaders are due to meet in November at the United Nations Climate Change Conference (COP26) taking place in Glasgow to flesh out commitments on energy transition.
Prices for coal, gas and electricity have also surged to record highs in recent weeks, driven higher by widespread energy shortages in Asia, Europe and the United States.
In India, some states are experiencing electricity blackouts because of coal shortages. China’s government, meanwhile, has ordered miners to ramp up coal production as power prices surge.
“The news from last week that the (U.S.) Department of Energy is not planning to tap into strategic reserves for now is keeping the oil market tight and is supporting prices,” said UBS analyst Giovanni Staunovo.
U.S. Energy Secretary Jennifer Granholm last week said the administration was considering tapping the country’s emergency oil reserves to cool gasoline prices, though the Energy Department later said it had “no plans to take action at this time”. read more
Drillers in the United States added five new oil wells last week for the fifth straight weekly increase in oil and gas rigs.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, last week decided to maintain a steady and gradual increase in output.
“Depleting stocks, OPEC discipline and the ongoing energy crunch will provide solid price support in the next three months,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
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