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Crude Oil

Oil Prices Surge Amid Middle East Tensions and Supply Disruption Fears

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Crude oil prices gained on Monday during the Asian trading session over possible supply disruption due to the ongoing fight between Israel and Iran-backed forces in the Middle East.

The Brent crude oil, against which Nigerian crude oil is priced, appreciated by 51 cents or 0.71% to $72.49 barrels at 3.30 am Nigerian time while the U.S West Texas Intermediate crude oil expanded by 43 cents or 0.63% to $68.61 a barrel.

The rise in oil prices was largely driven by the escalating tensions in the Middle East, involving Iran, a key crude oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC).

On Saturday, Israel announced the killings of key members of Hezbollah backed by Iran and warned of further consequences despite Iran and other vested interests in the region saying there would be retaliation.

Israel on Sunday announced it bombed Houthi targets in Yemen to expand its confrontation with Iran’s allies two days after killing Sayyed Hassan Nasrallah, the leader of Hezbollah in Lebanon.

The uncertainty surrounding the fight bolstered oil sentiment as traders have started factoring in possible disruption that could dampen oil supplies from the region.

The U.S. on Sunday announced it was strengthening its presence in the Middle East, with the Pentagon saying that should Iran, its partners, or its proxies target U.S. personnel or interests, Washington “will take every necessary measure to defend our people”.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Crude Oil

Brent Rises to $73 Per Barrel as Oil Producer Iran Plans Another Attack on Israel

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The international crude benchmark, Brent Crude, rose to $73 per barrel as it rose 29 cents or 0.4 percent to settle at $73.10 a barrel on Friday on expectations that Iran will attack Israel from Iraq in the coming days.

The US West Texas Intermediate (WTI) crude gained 23 cents, or 0.3 percent to settle at $69.49.

The market has seized on the news from Thursday that Iran is preparing to attack Israel from Iraq within days.

However, market analysts point out that the impact on oil prices may be muted as the attacks signify a show of strength rather than action. This is why there wasn’t a much price boost.

Iran’s backed groups are currently fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. So, this has seen the two countries engaged in a series of retaliatory strikes within the broader Middle East warfare set off by fighting in Gaza.

In a related development, the US asked Lebanon to declare a unilateral ceasefire with Israel to revive stalled talks to end hostilities between Israel and Hezbollah.

Another factor supporting prices is the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+ which could delay plans to increase supply in December.

The group has always maintained that its planning production cuts rollback would depend on market conditions.

The US, the world’s largest oil producer has been seeing an increase in its production with Exxon Mobil saying its global output hit an all-time high while Chevron also said its US production hit a record high.

This aligns with projections that annual output was on track to hit a record 13.2 million barrels per day in 2024 and 13.5 million barrels per day in 2025.

Last month, OPEC’s production increased by 370,000 barrels per day in October after Libya’s political resolution and its resultant 500,000 barrel-per-day output boost.

Libya’s output recovery led OPEC to raise its production to nearly 30 million barrels daily, even as Iraq, Iran, and Saudi Arabia lowered their output.

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Crude Oil

Rivers State Governor Refutes Claims of NNPCL Shutdown, Labels Report as ‘Propaganda’

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The Governor of Rivers State, Siminalayi Fubara has denied shutting down the Nigerian National Petroleum Company Limited (NNPCL), and other oil companies in the state as retaliation to a Federal High Court’s ruling barring the release of allocations to the state as widely reported.

Shortly after the court’s ruling, a report claiming that Fubara had ordered the immediate closure of NNPC and other oil companies in the oil rich state emerged on social media.

The report alleged that the Rivers State Governor declared that if the government fails to reverse the court ruling, there will be no oil for the country from Rivers.

Reacting to the allegation via a statement signed by the Commissioner for Information and Communications, Warisenibo Joe Johnson, the Rivers government said the report is not only false but a concocted propaganda from the enemies of the state.

The government urged Rivers people to ignore the report, adding that Fubara is committed to the rule of law and does not rely on unconventional and crude approaches to respond to matters of governance.

The statement reads, “The attention of Rivers State Government has been drawn to a spurious news item circulating on social media on “Gov. Siminalayi Fubara shutting down NNPCL and all oil companies in Rivers State”.

“The report was not only false, but a concocted propaganda from the imagination of the author and enemies of the State. The story was also circulated by an inconsequential and unverified medium

“Governor Siminalayi Fubara is committed to the rule of law and does not rely on unconventional and crude approaches to respond to matters of governance.

“We therefore enjoin Rivers people and well-meaning Nigerians to discountenance the spurious and fake report as Governor Fubara at no time contemplated and/or directed such needless order of shutting down the economy for any reason.”

Investors King reported that a Federal High Court in Abuja on Wednesday, restrained the Central Bank of Nigeria (CBN) from releasing monthly allocations to the Rivers State Government.

The judge, Joyce Abdulmalik, in a judgement, held that the receipt and disbursement of monthly allocations since January 2024 by Governor Siminalayi Fubara of Rivers State is a constitutional somersault and aberration that must not be allowed to continue.

Abdulmalik submitted that the presentation of the 2024 budget by Fubara before a four-member Rivers State House of Assembly was an affront to the constitutional provision.

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Crude Oil

Possible Iran Attack on Israel Boost Oil Prices

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Crude oil

Oil prices recorded a rise in the international market on reports that Iran is preparing to attack Israel again, adding to tensions in the Middle East.

Brent crude rose by $2.10 or 2.91 percent to $74.26 while the US West Texas Intermediate (WTI)  jumped $2.15 or 3.13 percent to $70.76.

Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the US presidential election on November 5.

The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles as attacking through pro-Iran militias in Iraq could be an attempt by Iran to avoid another Israeli attack against strategic targets in the country.

Israel and Iran have engaged in a series of military strikes, part of broader Middle East warfare set off by fighting in Gaza.

Iran had said it would use all available tools to respond to strikes carried out by Israel after Israel’s military jets struck missile factories and other sites near Tehran and in western Iran in retaliation for the country’s October 1 barrage of more than 200 missiles against Israel.

This renewed tension raises worries for the market as Iran is a member of the Organisation of the Petroleum Exporting Countries (OPEC) with production of around 3.2 million barrels per day or 3 per cent of global output.

There were worries that Israel could target Iran’s nuclear facilities but it only attacked just military targets near energy facilities and that eased earlier this week. Now, another retaliation could create provocation that would see them attack the infrastructure.

Market analysts noted that damage to air defences on Iran’s energy infrastructure has increased their vulnerability to future attacks.

Prices also continued to gain on reports that OPEC could delay its planned oil output increase as the wider OPEC+ is scheduled to meet on December 1 to decide its next policy steps.

Meanwhile, in China, the world’s biggest oil importer, manufacturing activity expanded in October for the first time in six months, suggesting stimulus measures are having an effect.

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