Oil
Oil Futures Up on Strong Refiner Demand
NEW YORK – U.S. crude-oil futures prices rose Thursday, lifted by the strongest demand from refiners since July.
Analysts said prices also drew support from mixed U.S. economic data, which they said could lead the Federal Reserve to keep its bond-buying program in place until at least January.
New claims for U.S. jobless benefits rose last week by 368,000, the largest increase in more than a year, the Labor Department said. The data topped economists’ forecasts of a rise of 328,000.
Meantime, U.S. retail sales in November climbed by 0.7%, slightly above expectations, and were up 4.7% from a year earlier, the Commerce Department said.
Carl Larry, analyst at Oil Outlooks and Opinions, said the still uncertain jobs picture raises the odds that the Fed won’t begin to reduce its stimulus program this month. The ongoing bond-buying program has contributed to strength in oil prices, analysts said.“The economy is starting to look good and getting better, but we’re far from looking great,” Mr. Larry said, adding he expects the Fed to remain cautious.
Light, sweet crude oil for January delivery on the New York Mercantile Exchange was 43 cents higher, at $97.87 a barrel.
ICE Brent crude oil was 65 cents lower, at $109.05 a barrel, pressured by expectations that Libya soon will resume oil exports that have been curtailed by labor disputes.
U.S. oil inventories dropped by a huge 10.585 million barrels last week, the Energy Information Administration reported Wednesday, as refiners lifted processing rates to 16.1 million barrels a day, the most since July and a record high for December.
Refinery output of distillate fuel (diesel/heating oil) hit a record high last week as oil companies looked to boost exports of the fuel to Europe, Latin America and Asia, where demand is stronger than it is in the U.S.Domestic crude oil output climbed to a 25-year high above 8 million barrels a day last week, and topped the year-earlier level by 1.2 million barrels a day. Use of hydraulic fracturing and horizontal drilling techniques allow producers to extract crude oil from shale, slashing the need for U.S. to import crude oil.
The U.S. relied on foreign supplies to meet just 26.8% of oil demand of 18.554 million barrels a day last week, the lowest level on EIA’s weekly data beginning in February 1991.
Net imports of crude oil and refined products dropped by nearly 3 million barrels a day from a year earlier to 4.97 million barrels a day, the lowest level since February 1992, EIA data show.
The strong refinery operations allowed petroleum products stocks to rise sharply, with gasoline stocks up 6.7 million barrels and distillate stocks up 4.5 million barrels. Analysts said there is concern that U.S. oil demand needs to recover and exports need to continue at strong levels to avoid a glut of refined products.
Reformulated gasoline blendstock futures for January were 0.62 cent lower, at $2.6549 a gallon, while January diesel/heating oil futures were down 1.72 cents at $3.004 a gallon.
– WALL STREET JOURNAL
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.