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Nigeria’s Daily Crude Oil Production Rises to 1.61 mbpd, Says NUPRC

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced a notable increase in daily crude oil production.

As of July 23rd, production levels have surged to 1.61 million barrels per day (mbpd), up from 1.25 mbpd in June.

This announcement was made by Gbenga Komolafe, the Commission Chief Executive of NUPRC, during a two-day public investigative hearing on oil theft and losses, held by the House of Representatives Special Committee.

Komolafe said Nigeria is Africa’s largest crude oil producer, with proven reserves of 37.50 billion barrels and a production capacity of approximately 2.19 mbpd.

Despite facing significant challenges, particularly at terminals in Bonny, Brass, and Forcados, the NUPRC has implemented several innovative measures to enhance transparency and accountability in the sector.

“To accurately account for losses and differentiate them from operational losses, the Commission has employed end-to-end production monitoring and a mass balance methodology,” Komolafe explained.

He highlighted the introduction of advanced measures such as the Advanced Cargo Declaration (ACD) Regulation, which ensures no crude oil is exported without proper accounting.

This includes assigning a unique identification number to each cargo, mandating reliable metering systems, and utilizing real-time cargo tracking and digital documentation.

The NUPRC’s mandate encompasses the oversight of exploration, development, production, and lifting operations of crude oil and natural gas.

This includes regulating both the technical and commercial aspects of operations in Nigeria’s upstream petroleum sector, ensuring optimal tax revenue generation, royalty collection, and cost benchmarking.

Key areas of focus for the Commission include maintaining business continuity and production sustainability, accurate measurement and timely payment of royalties, uninterrupted crude oil and natural gas supply to the domestic market, and upholding safety, health, and environmental standards.

Komolafe reaffirmed the Commission’s commitment to continued engagement with stakeholders to optimize Nigeria’s oil production and maintain its leadership position in Africa’s energy sector.

He also noted the prioritization of improving rig availability and reducing non-productive time through unlocking heavy crude oil reserves and supporting new Petroleum Prospecting License (PPL) awardees to achieve their first oil.

These strategic initiatives aim to optimize production, enhance regulatory oversight, and ensure accurate measurement and accounting, positioning Nigeria for continued growth and stability in the global oil market.

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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Oil Trades Lower on US Hurricane Ease, China Economic Worries

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Oil prices dropped in the international market on Friday as traders overlooked supply disruptions from a hurricane in the US Gulf of Mexico just as moves by China to help its economy failed to impress some oil traders.

The global benchmark Brent crude futures fell by 2.3 percent or $1.76 to $73.87 per barrel while the US West Texas Intermediate (WTI) futures settled at 70.35 per barrel, down by 2.7 percent or $1.98.

In the world’s largest oil-producing country, the US, producers shut in more than 23 percent of oil output in the US Gulf of Mexico by Friday to brace against Hurricane Rafael.

According to the US National Hurricane Center’s latest advisory, the storm weakened to a Category 2 hurricane on Friday, and this eased worries and oil prices.

Meanwhile, concerns about China proved to be more than examined even as the government announced a package easing debt-repayment strains for local governments.

However, these measures do little to directly target demand as concerns about weakening demand in China, the world’s largest oil importer, have also contributed to the oil price decline after data showed crude imports in China fell 9 percent in October.

The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of electronic vehicles (EVs) in one of the most advanced economies.

Despite Friday’s losses, oil prices gained more than 1 per cent week-over-week taking support from the emergence of Mr Donald Trump as the next president of the US and the US Federal Reserve’s decision to cut interest rates by a quarter percentage point.

Oil producers are looking forward to fewer regulations on crude production under a Trump presidency, meaning higher oil supply and consequently lower prices.

On the flip side, a Trump administration also means more sanctions on Iranian and Venezuelan barrels, which could cut oil supply to global markets and potentially boost prices.

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Brent, WTI Crude Prices Rise in Response to Expected Trump’s Policies

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Oil prices rose nearly 1 percent on Thursday as the market considered how US President-elect Donald Trump’s policies would affect supplies.

Brent crude oil futures settled up 71 cents, or 0.95 percent at $75.63 a barrel while the US West Texas Intermediate (WTI) crude rose 67 cents, or 0.93 percent to $72.36.

Prices gained support from expectations that Trump’s incoming administration may tighten sanctions on Iran and Venezuela.

On Wednesday, the election of former Republican President Trump initially triggered a sell-off that pushed oil down by more than $2 as the US dollar rallied.

A strong Dollar makes oil expensive and this typically leads to a drop in prices.

In his first term, Mr Trump put in place harsher sanctions on Iranian and Venezuelan oil, limiting supply and supporting oil prices.

However, his successor, Mr Joe Biden briefly rolled back the sanctions but he would later reinstate them.

Such a move would raise the cost of China’s imports, piling pressure on a refining sector grappling with weak fuel demand and tight margins.

However, China and Iran have built a trading system that uses mostly Chinese Yuan and a network of middlemen, avoiding the Dollar and exposure to US regulators, making sanctions enforcement tough.

However, analysts say that the US government has been reluctant to take steps that would remove supply from the global market as a result of the Russia-Ukraine war.

Also supporting prices, the US Federal Reserve cut interest rates by a quarter of a percentage point at the close of its policy meeting on Thursday.

The US Federal Reserve said it will continue assessing data to determine the pace and destination of interest rates as officials reset tight monetary policy to account for inflation that has slowed markedly in the past year and is nearing the US central bank’s 2 percent target.

Interest rate cuts typically boost economic activity and energy demand.

Support also came as some companies cut supply in the US due to Hurricane Rafael. According to the US Bureau of Safety and Environmental Enforcement (BSEE), over 22 percent equivalent to 391,214 barrels per day, of crude oil production was shut in response to the hurricane.

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Oil Prices Fall on Stronger Dollar Following Donald Trump’s Presidency Re-emergence

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Oil prices settled lower on Wednesday as investors weighed a strong US Dollar as Donald Trump won the US presidential elections.

Brent crude oil futures settled down 61 cents, or 0.81 percent at $74.92 per barrel while the US West Texas Intermediate (WTI) crude settled down 30 cents or 0.42 percent to $71.69.

Mr Trump’s victory in the US presidential election unleashed a massive rally in the Dollar and since a stronger Dollar makes commodities such as oil more expensive for holders of other currencies, prices fell.

The election of the man who once held office from 2016 to 2020 means the renewal of sanctions on Iran and Venezuela, removing barrels from the market, which would be bullish.

Trump’s support for Israel’s Prime Minister Benjamin Netanyahu could heighten instability in the Middle East and
could boost oil prices as investors price in a potential disruption to global oil supplies.

When he assumes office, it is expected that he will continue to support Israel’s efforts.

Commodity experts at Standard Chartered have predicted that OPEC+’s actions are likely to determine the near- and mid-term trajectory of oil prices.

According to StanChart, much of the negative sentiment that has dominated oil markets over the past three months can be chalked up to misapprehensions about the tapering mechanism for the voluntary cuts made by eight OPEC+ countries.

Also, many traders are worried that the balance of oil demand growth and non-OPEC+ supply growth might not offset the scale of restored OPEC+output, leaving oil markets oversupplied.

OPEC recently announced that output increases would be postponed by a month until the start of 2025.

Prices were pressured after the US Energy Information Administration (EIA) reported an inventory build of 2.1 million barrels for the week to November 1.

This compared with a modest inventory draw of half a million barrels for the previous week and a crude oil inventory build for the week to November 1 as estimated by the American Petroleum Institute (API) on Tuesday.

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