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Exxon Mobil Corp Commits to Increasing Oil Production in Nigeria

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Exxon Mobil Corp has announced plans to boost its oil production in Nigeria by an additional 40,000 barrels per day.

This renewed commitment to Nigeria’s energy sector was disclosed by Exxon’s President of Global Upstream Operations during discussions with Nigerian President Bola Tinubu in New York, on the sidelines of this week’s U.N. General Assembly.

The aim of this meeting was to attract global investments to Africa’s largest economy as stated by presidential spokesperson Ajuri Ngelale in a recent statement.

Nigeria’s state oil firm, NNPC Ltd., has been engaged in joint ventures and offshore production-sharing contracts with major oil companies, including Exxon, responsible for more than 80% of the nation’s oil production.

Exxon expressed its satisfaction with the progress it has made in Nigeria, with Liam Mallon, an executive at the company, saying, “We are growing our production, and we are working diligently to expand our deepwater production.”

While an Exxon spokesperson confirmed the discussions with the Nigerian president, they declined to provide specific details about the talks.

Nigeria has recently witnessed a notable increase in its oil and condensates production, surging from just under a million barrels per day to 1.67 million barrels per day. This upturn is attributed to enhanced security measures in the oil-rich Niger River delta region.

However, despite the passage of a historic oil bill two years ago aimed at reducing regulatory uncertainties and attracting investments, Africa’s largest oil producer continues to face challenges such as widespread theft and sabotage within its oil industry.

According to the official statement, President Tinubu has vowed to address these lingering issues and eliminate any hindrances that impede the inflow of new and substantial capital into Nigeria’s energy sector.

He said, “The complex issues necessitate direct oversight on my part. Despite numerous competing responsibilities, I am committed to personally overseeing the process of resolving these obstacles.”

He concluded by stating, “Nigeria has never been better prepared for business than it is today.”

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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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