Connect with us

Crude Oil

Oil Prices Rise Amidst Global Banking Concerns and Russian Nuclear Tensions

Published

on

Crude Oil - Investors King

Oil prices rose on Monday as investors evaluated efforts by authorities to address concerns about the global banking system.

Brent crude oil, against which Nigerian oil is priced increased by 1.03% or 77 cents, reaching $75.76 a barrel at 9:00 am, while the US West Texas Intermediate crude rose by 1.03% or 74 cents to $70 a barrel. This follows a 2.8% increase in Brent and a 3.8% rebound in WTI as concerns in the banking sector decreased.

Despite the oil fundamentals remaining on the sidelines, crude markets are observing the sentiment in the financial market, according to Vandana Hari, the founder of oil market analysis provider Vanda Insights.

Hari stated, “Expect most price action in Brent and WTI futures to occur during the Europe and US trading hours, marked by plenty of intraday volatility.” Hari added that a strong rebound is not expected until the banking crisis is fully resolved, which may take days or weeks.

In other news, First Citizens BancShares Inc announced that it will acquire the deposits and loans of Silicon Valley Bank, closing one chapter in the financial market crisis. Furthermore, the US authorities are reportedly discussing expanding emergency lending facilities, which has given hopes for additional support for bank funding.

Oil prices have also gained support from Russian President Vladimir Putin’s announcement to place tactical nuclear weapons in Belarus, which has escalated tensions in Europe. It is one of Russia’s most significant nuclear signals yet, and it serves as a warning to NATO over its military support for Ukraine.

In response, Ukraine has called for a meeting of the United Nations Security Council, and NATO criticized Putin’s “dangerous and irresponsible” nuclear rhetoric.

Despite the rise in oil prices, Russia’s Deputy Prime Minister Alexander Novak has reported that Moscow is on the verge of achieving its target of reducing crude output by 500,000 barrels per day (bpd) to around 9.5 million bpd.

However, according to industry sources and Reuters calculations, Russia’s crude exports are expected to remain steady as it cuts refinery output in April. Since September 2022, Russian crude stocks have been increasing, and experts suggest that if Russia wants to draw down the inventories it has built, output cuts may need to be extended beyond June.

Meanwhile, in France, industrial action is affecting refineries, reducing crude demand and fuel production. Investors are awaiting China’s manufacturing and services purchasing managers’ indexes for cues on demand from the world’s leading crude oil importer.

According to Baker Hughes Co, oil rigs rose by four to 593 last week in the US, up for the first time in six weeks, while gas rigs held steady at 162.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Crude Oil

Weak Chinese Data Weighs on Oil Prices Today

Oil prices declined by 2% on Wednesday as weak Chinese data and a stronger United States dollar dragged on commodity prices.

Published

on

Crude Oil - Investors King

Oil prices declined by 2% on Wednesday as weak Chinese data and a stronger United States dollar dragged on commodity prices.

Brent crude oil, against which Nigerian oil is priced, dipped by $1.75, or 2.37%, to $71.96 a barrel at 3:46 pm while U.S. West Texas Intermediate crude (WTI) shed $1.90, or 2.74%, to $67.56.

The decline in prices was caused by weak Chinese manufacturing activity. The data released by the Chinese government showed that activity in the sector contracted faster than expected in May with the official manufacturing purchasing managers’ index declining from 49.2 posted in April to 48.8 in May, below the 49.4 predicted by economists.

Also, the strong U.S. dollar is another factor impacting the purchase of crude oil as buyers holding foreign currencies found it too expensive.

The U.S. dollar index, which measures the greenback against six major peers, saw support from cooling European inflation and progress on the U.S. debt ceiling standoff, which will advance to the House of Representatives for debate on Wednesday.

Market players are preparing for the upcoming June 4 meeting of OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia.

Mixed signals by major OPEC+ producers on whether or not the group will decide to further cut oil production have sparked recent volatility in oil prices.

Despite the latest pullback in prices, HSBC and analysts do not expect OPEC+ to announce further cuts in the upcoming meeting.

HSBC said on Wednesday that stronger oil demand from China and the West from the summer onwards will bring about a supply deficit in the second half of the year.

Continue Reading

Crude Oil

NNPCL Confirms Pump Price Upward Review, See New Price List

The Nigerian National Petroleum Corporation Limited (NNPCL) on Wednesday confirmed it has indeed increased the price of petrol across the country.

Published

on

Petrol - Investors King

The Nigerian National Petroleum Corporation Limited (NNPCL) on Wednesday confirmed it has indeed increased the price of petrol across the country.

This was made known in a statement signed by Garba Deen Muhammad, the Chief Corporate Communications Officer of NNPC Ltd, and made available to the public.

The statement reads “NNPC Limited wishes to inform our esteemed customers that we have adjusted our pump prices of PMS across our retail outlets, in line with current market realities.

“As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.

“We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products.

“The company sincerely regrets any inconvenience this development may have caused. We greatly appreciate your continued patronage, support, and understanding during this time of change and growth.”

Price of petrol jumped up across the country immediately after President Bola Ahmed Tinubu declared that the fuel subsidy is gone on Monday during his inauguration.

Checks by Investors King show that in some parts of the country, prices rose as high as 500% before NNPCL reportedly released the widely circulated list below to curtail marketers’ excesses.

Price was cheapest in Lagos at N488 a litre because of its close proximity to the port while it was highest in the northern states with Maiduguri and Damaturu recording the highest at N557 a litre. See the list below

NNPCL outlets across the country have been directed to implement the new price, starting from May 31, 2023.

“DEAR ALL. Following Management approval of the Upward review of NNPC PMS pump price as in below table for Mega/Standard/Leased Stations, Please find below schedules for the RMSs and Wayne to handle. Please implement meter change as approved effective today 31st May 2023. Wayne is to attend to all locations as relates to their area of coverage in our network,” a statement read.

Continue Reading

Crude Oil

NNPC Claims Federal Government Owes N2.8 Trillion in Petrol Subsidy

Mele Kyari, the group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, has revealed that the federal government still owes the firm a staggering sum of N2.8 trillion, which was spent on petrol subsidy.

Published

on

Mele Kyari - Investors King

Mele Kyari, the group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, has revealed that the federal government still owes the firm a staggering sum of N2.8 trillion, which was spent on petrol subsidy.

During a press briefing following a meeting with President Bola Tinubu in Abuja on Tuesday, Kyari emphasized that the subsidy payment has become unsustainable, hindering the company from adequately funding its core operations.

He stated, “Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime, and we can’t continue to build this.”

Kyari further explained that despite the provision of “N6 trillion in 2022, and N3.7 trillion in 2023,” the NNPC has not received any payment from the federation. The NNPC had been using its cash flow to cover the petrol subsidy payments, but the government has been unable to reimburse the N2.8 trillion that has already been spent.

He elaborated, “That means they (the federal government) are unable to pay, and we have continued to support this subsidy from the cash flow of the NNPC. When we deduct our fiscal obligations of taxes and royalties, there is still a balance that we are funding from our cash flow. And that has become very difficult and it is affecting our other operations.”

Kyari expressed concern that the inability to retain cash for investment in their core businesses poses significant challenges for the company.

He stressed that the government must compensate and repay the NNPC for the money spent on the subsidy.

He stated, “So, today the country does not have the money to pay for the subsidy. There is an incremental value that will come from it. But it is not an issue of whether you can do it or not because today we cannot afford it, and they are not able to pay our bill. That comes to how much the federation owes the NNPC now. Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime, and we cannot continue to build this.”

It was reported by Investors King that subsidy payments reached N3.3 trillion in the previous year, spanning 11 months. The immediate past federal government had budgeted N3.35 trillion for energy subsidy in the first half of the year, assuring that under-recovery payments would cease.

On April 5, the federal government announced it had secured $800 million loan from the World Bank as part of its post-subsidy palliative plans.

Regarding the recent petrol queues across the country, Kyari emphasized that the confusion arose from the president’s statement that “subsidy is gone.”

Marketers and consumers were seeking clarity on the matter, which caused a rush for petrol and subsequently led to queues.

Kyari assured Nigerians that the government would implement measures to mitigate the impact of subsidy removal starting in June.

Continue Reading
Advertisement
Advertisement




Advertisement
Advertisement
Advertisement

Trending