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Oil Futures Fall Ahead of Inventory Report

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NEW YORK – Oil futures declined Wednesday as traders were cautious ahead of a closely-watched inventory report expected to show a second straight week of declining U.S. crude inventories.

Meanwhile, the International Energy Agency provided the latest indication the oil market is well supplied, though it said global oil demand will be higher than expected next year.Light, sweet crude for January delivery fell 33 cents, or 0.3%, to $98.18 a barrel on the New York Mercantile Exchange. Earlier in the session, prices for the U.S. contract, known as West Texas Intermediate, or WTI, approached their highest level since late October. Nymex crude has posted gains in seven of the past nine trading days amid signs of increasing demand.

Brent crude on ICE Futures Europe fell 39 cents, or 0.4%, to $108.99 a barrel.

OIL FUTUREAnalysts expect the report from the Energy Information Administration, due out at 10:30 a.m. EST, to show crude stockpiles fell by 2.5 million barrels in the week ended Dec. 6.

Late Tuesday, the American Petroleum Institute, an industry trade group said its own weekly inventory survey found crude supplies fell by 7.5 million barrels last week.

“The market doesn’t believe the magnitude of the API draw,” said Andy Lipow, president of Lipow Oil Associates, a consulting firm.

He added, “That’s not to say I don’t expect a decline, but the concern is that we still have a lot of crude oil inventory building up on the Gulf Coast and the draws we have seen are relatively small compared to the crude runs now.”

Prior to a 5.6-million barrel decline for the week ended Nov. 29, crude stocks had risen for 10 straight weeks and reached their highest end of November level since 1930, according to government data.

Traders expect supplies to fall as refiners continue to ramp up their operations following seasonal maintenance work. The utilization rate for last week is expected to climb 0.3 percentage points to 92.7% of capacity, which would be the highest such level since mid-July.

Earlier Tuesday, the IEA, the top energy watchdog, said November production from rivals of the Organization of the Petroleum Exporting Countries exceeded 43 million barrels a day for the first time in decades largely due to the U.S. shale boom.

Domestic oil output has climbed to record highs as hydraulic fracturing and horizontal drilling techniques have allowed energy companies to extract supplies trapped in shale-oil fields.

However, the IEA boosted its oil demand forecast by 130,000 barrels a day for this year and 240,000 barrels a day in 2014 amid economic growth.

Front-month January reformulated gasoline blendstock, or RBOB, recently fell 1.68 cents, or 0.6%, to $2.6660 a gallon. January heating oil declined 0.31 cents, or 0.1%, to $3.0167 a gallon.

– WALL STREET JOURNAL

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Oil

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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