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Crude Oil Futures Ease Ahead of Iran Talks

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NEW YORK -Brent crude futures eased Tuesday ahead of talks that could lead to the eventual resumption of Iran’s crude exports.

Prices for Brent for January delivery were down 79 cents, or 0.7%, at $107.68 a barrel, while West Texas Intermediate for December, the U.S. benchmark, was down 39 cents, or 0.6%, at $92.64 on the New York Mercantile Exchange. The December contract for WTI expires Wednesday.

Analysts said the market was taking stock of growing oil supplies and inventories around the world, including the possibility of the return of Iran’s 1 million barrels per day of crude as talks resume Wednesday between the U.S. and Iran that could lead to the easing of sanctions. In the U.S., inventories are almost 13% above the five-year average, and production in the past four weeks is about 19% higher than a year ago.

“The WTI market can’t be considered tight,” Citigroup C +0.85% said in a research note.

CRUDE OILThe possibility of Iran’s exports returning to the market means few speculators are betting that the price of Brent will rise from here, analysts at Commerzbank said.

Money managers cut their net-long positions in Brent by a further 21,000 contracts in the week ended Nov. 12, the Commerzbank analysts wrote in a note to clients. Long positions are bets that crude prices will rise, so a reduction in the net amount of longs shows a lack of confidence in higher prices.

Commerzbank said this was the 10th such reduction in the past 11 weeks.

“During this same period, speculative net-long positions in Brent plummeted by 60% from the record high they achieved at the end of August,” the analysts said.

U.S. crude prices are extending a retreat that began in early October, with front-month prices more than 14% below their highs in late August.

“Investor sentiment was dampened by speculation that the (Federal Reserve) could begin tapering bond buying sooner than anticipated,” wrote Kash Kamal, a research analyst at Sucden Financial, in a note to clients. Attention will turn to the Federal Open Market Committee minutes, due Wednesday, and a speech due from outgoing Federal Reserve Chairman Ben Bernanke later Tuesday.

Monthly data from the American Petroleum Institute, due later Tuesday, may provide some more guidance on the country’s supply-demand balance.

Front-month December reformulated gasoline blendstock, or RBOB, was down 1.95 cents, or 0.7%, at $2.6373 a gallon. December heating oil was down 0.27 cent, or 0.1%, at $2.9195 a gallon.

– WALL STREET JOURNAL

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FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

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ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

 

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