Connect with us

Business

Dollar Snaps Four-Day Advance on Services Report; Won Tumbles

Published

on

WASHINGTON – The dollar fell for the first time in five days, ending its longest rally in two months, after a report showed services unexpectedly declined in December.

The euro climbed from a one-month low against the dollar as industry data confirmed the region’s services output expanded for a fifth month before the European Central Bank discusses interest rates on Jan. 9. South Korea’s won tumbled on bets the central bank will cut borrowing costs. South Africa’s rand gained after Moody’s Investors Service said the country will retain its investment-grade credit rating.

dollar“There was a bit of dollar weakness off that data,” Alan Ruskin, the New York-based global head of Group of 10 foreign-exchange at Deutsche Bank AG, the world’s largest currency trader, said in a phone interview. “Over the year, we’re still constructive on the dollar” as the U.S. economic outlook improves.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.2 percent to 1,023.87 at 5 p.m. in New York after climbing to 1,029.67 on Jan. 2, the highest since Sept. 9. It completed a six-day rally on Nov. 1.

The dollar fell 0.3 percent to 1.3629 per euro after rising to $1.3572, the highest level since Dec. 5. The greenback slid 0.6 percent to 104.22 yen, while the Japanese currency advanced 0.3 percent to 142.04 per euro.

Won Tumbles

South Korea’s won weakened the most in six months against the dollar the dollar, dropping 1 percent to close at 1,065.42. The currency jumped 7.2 percent against the greenback in the past six months.

The strong won is contributing to tighter monetary conditions that may hurt the recovery and prompt the central bank to cut its policy rate at a meeting this week, Goldman Sachs Group Inc. said in an e-mailed note.

“The early trend to the year appears to have been to liquidate or take profit on trades that did quite well through the second half of 2013,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. in Singapore. The won still looks “expensive” at these levels, he said.

South Africa’s rand gained as Moody’s said in an e-mailed report that the nation’s debt levels are “manageable” and a pickup in demand from Europe and the U.S. is “promising” for growth in 2014. The nation’s rating will probably remain in the Baa range “for the foreseeable future,” it said. Moody’s rates South Africa Baa1, the third-lowest investment level, with a negative outlook.

The rand climbed 1 percent to 10.6496 per dollar after sliding to 10.76 on Jan. 3, the weakest since November 2008. The currency tumbled 19 percent last year.

Yen Shorts

The yen gained after dropping 14 percent in the past 12 months for the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar climbed 3.8 percent and the euro advanced 8.4 percent, the best performer.

Hedge funds and other large speculators trimmed bets the yen will weaken from almost a seven-year high, according to data from the Commodity Futures Trading Commission. The difference in the number of wagers on a decline in the currency compared with those on a gain — so-called net shorts — was 135,228 as of Dec. 31, compared with 143,822 a week earlier that was the most since July 2007.

Service Industries

The dollar declined against most major peers as the Institute for Supply Management non-manufacturing index decreased to 53 last month from 53.9 in November, a report from the Tempe, Arizona-based group showed today. The median projection in a Bloomberg survey of 69 economists was 54.7. Estimates ranged from 53 to 57.7. Readings above 50 indicate growth in the industries that make up 90 percent of the economy.

“The ISM data was just one thing — U.S. data has been surprising on the upside,” said Thanos Vamvakidis, a currency strategist at Bank of America Merrill Lynch in London. “In the short term, euro-dollar will stay in the current range. Looking forward, as tapering continues, and even as the ECB remains on hold, the euro will gradually weaken.”

Official data last week showed U.S. manufacturing expanded for a seventh month in December, while jobless claims fell by 2,000 to 339,000 in the period ended Dec. 28.

Fed Taper

Fed officials said Dec. 18 they would trim monthly purchases of bonds to $75 billion from $85 billion starting this month. The central bank will probably reduce its quantitative easing in $10 billion increments over the next seven meetings, before ending the program in December 2014, according to the median estimate of economists surveyed by Bloomberg on Dec. 19.

The euro rose for the first time in three days against the dollar as Markit Economics said its services index, based on a survey of purchasing managers, was 51 last month from 51.2 in November. That’s in line with an initial estimate on Dec. 16. A reading above 50 indicates expansion.

Europe has a “better balance of payments, lack of stimulus, external demand amid tightening periphery spreads,” Geoffrey Yu, a senior currency strategist at UBS AG in London, said via e-mail message, explaining investors’ cautious optimism on the European economic recovery.

– BLOOMBERG

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

How Oil Cabals Crippled Govt Refineries, Now Scheming Against Dangote Refinery – Pastor Adeboye

Published

on

 

The General Overseer of the Redeemed Christian Church of God (RCCG), Pastor Enoch Adeboye, has urged Nigerians to pray for divine intervention in the face of efforts by unscrupulous oil marketers to thwart the operations of the Dangote Petroleum Refinery, following the previous sabotage of Nigeria’s four state-owned refineries.

The respected clergyman made the call for nationwide prayers during the November 2024 Abuja Special Holy Ghost Service themed ‘Total Restoration’, in Nigeria’s capital city.

Though Pastor Adeboye did not explicitly name the Dangote Petroleum Refinery, many read his remarks to have echoed ongoing attempts by oil marketers to prevent the refinery from functioning as it was designed to.

ALSO READ: FIRS Names Dangote Group Most Tax Complaint Business

With the Ibeju-Lekki, Lagos based Dangote Refinery about the only facility currently refining petrol in Nigeria, many read Pastor Adeboye’s comments to reflect the dispute between the refinery and oil marketers, who seek to continue importing refined products.

Pastor Adeboye reminded the congregation that it was God who raised Aliko Dangote to establish a refinery after years of failed attempts to revive Nigeria’s four public refineries, which had consumed billions of Naira with little result.

He questioned the persistence of fuel imports despite Nigeria’s status as a major crude oil producer.

“Are we under a curse?” he asked. “We have four refineries, we poured all kinds of money into them, none of them is working. But God raised someone to build a refinery that works. He is not my relative, he is not from my village. He is not even a Christian, but he is a Nigerian who says, ‘Why should my people suffer when I have the means to build a refinery that can work?’ Now he is refining petrol, and some people want to stop him from selling it, so they can keep importing.”

Pastor Adeboye also pointed out the damage caused by the fuel subsidy, describing it as a significant drain on Nigeria’s resources, contributing to the country’s mounting debts and corruption.

He stressed that when President Bola Ahmed Tinubu announced the end of the subsidy in 2023, Nigerians largely welcomed the decision, but oil marketers, who benefitted from the subsidy regime, were furious.

The marketers, according to the renowned pastor, appear to have gone into alliances with some International Oil Companies (IOCs) and other powerful interests to obstruct the Dangote Petroleum Refinery. This includes restricting access to crude oil, forcing Dangote to import crude from countries like the United States, among others.

He called for prayer for the total restoration of the country, noting that the Nigerian people are suffering the consequences, as the prices of essential goods have soared, pushing many items beyond the reach of ordinary citizens. “The masses are the ones suffering because these marketers, who are bent on keeping imports alive, already have more money than they can ever spend,” he said.

Despite the Dangote Petroleum Refinery’s capacity to meet Nigeria’s entire demand for petroleum products – and even to export surplus fuel – oil marketers continue to pressurise the government to allow ongoing petrol imports. This has placed additional strain on the Naira, which has continued to depreciate.

Recall that the Crude Oil Refineries Owners Association of Nigeria (CORAN) had urged the government to protect local refineries from unfair competition posed by importers and international petroleum traders, in line with provisions in the Petroleum Industry Act (PIA).

Continue Reading

Business

Petrol Prices To Drop As IPMAN, Dangote Strike Supply Deal

Published

on

In a major development for Nigeria’s oil market, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has secured an agreement with Dangote Petroleum Refinery to begin lifting petroleum products, directly, for distribution in the domestic market.

This agreement aims to stabilize and potentially lower pump prices for consumers by ensuring a consistent supply of refined products like Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Dual-Purpose Kerosene (DPK) directly from the refinery.

Announcing the deal, IPMAN’s National President, Abubakar Garima, highlighted the economic benefits of this collaboration. “The new arrangement with Dangote Refinery will ensure a steady and ceaseless supply of PMS products all over Nigeria at an affordable rate,” Garima stated at a press briefing in Abuja.

This move is expected to reduce the influence of middlemen, cut costs, and enhance price stability in the oil sector, a vital aspect of Nigeria’s economy.

READ MORE: U.S. Offers $25,000 Reward For Nigerian Fugitive Wanted For Alleged Child Murder

The agreement follows recent challenges faced by IPMAN, which, despite paying a substantial sum of N40 billion to the Nigerian National Petroleum Company Limited (NNPCL), struggled to source refined products. In response, Dangote officials had previously remarked that though the refinery held ample stock, marketers had yet to make adequate payments. However, Garima’s remarks reflect optimism that this direct deal will foster smoother operations.

Energy expert Kelvin Emmanuel has suggested the deal could significantly reduce overheads for IPMAN, potentially eliminating certain financing and margin costs previously incurred through NNPCL, bringing down the overall cost per metric tonne of petroleum.

Additionally, IPMAN’s support for the Federal Government’s Compressed Natural Gas (CNG) initiative signals a shift towards diversifying energy sources. The association has called on its members to prepare for CNG infrastructure at their stations, anticipating that CNG will play a vital role in rejuvenating Nigeria’s energy landscape.

With this new arrangement, IPMAN and Dangote aim not only to enhance petroleum accessibility but also to contribute to economic growth and job creation. Garima also emphasized the importance of IPMAN members backing this deal, aligning with the government’s broader goals for energy stability and affordability, especially as Nigeria seeks to lessen its reliance on imports.

Continue Reading

Business

Kyari Outlines Vision For Nigeria’s Energy Future

Published

on

 

Group CEO of the NNPC Ltd., Mele Kyari has reiterated the company’s commitment to resolving Nigeria’s energy trilemma, by ensuring energy security, sustainable growth and energy affordability.

This was contained in statement by the Chief Corporate Communications Officer, NNPC Ltd, Olufemi Soneye, issued on Monday evening on its verified handle on micro-blogging site, X.

According to the statement, Kyari disclosed this at the opening ceremony of the 42nd Nigeria Association of Petroleum Explorationists (NAPE) Annual International Conference and Exhibition themed: “Resolving the Nigeria Energy Trilemma: Energy Security, Sustainable Growth and Affordability” in Lagos, on Monday.

ALSO READ: Nigeria, Africa Urged To Leverage Trump’s Victory For Economic Boost

The GCEO, who was the Special Guest of Honour at the occasion, also said the company has perfected plans to deliver 12 Compressed Natural Gas (CNG) Mother Stations and Mini LNG Plants soon, as part of efforts to boost the existing 1.6 billion standard cubic feet (bscf) of gas supply for domestic market.

“The energy trilemma is a profound responsibility we shoulder as stewards of Nigeria’s energy future. NNPC Ltd. is working tirelessly to improve our supply chain, develop new refining capacities and expand our retail network,” Kyari stated.

According to him, NNPC Ltd. is set to collaborate with private refineries to ensure affordable and sustainable petroleum products supply; Naira-for-crude transactions in order to stabilise the local currency and regulate forex markets.

This, he added, will bring about expansion of gas infrastructure such as the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and the Obiafu-Obrikom-Oben (OB3) Gas Pipelines projects and the development of cleaner energy options, such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG).

“Currently, NNPC Ltd. supplies over 1.6 bscf of gas per day to the domestic market through infrastructure we either own outrightly or operate with partners. This distribution network is entirely managed on NNPC Ltd.’s balance sheet,” Kyari added.

Explaining that the Company is expanding its efforts to enhance domestic energy access, the NNPC Ltd. helmsman said the next 3-6 months will see significant project launches, including CNG mother stations, mini-LNG plants, and additional CNG daughter stations.

Kyari, who commended President Tinubu’s efforts to relieve forex pressures by reducing fuel imports and strengthening Nigeria’s local refining capacity, emphasised the need for collaboration, innovation, and technology in achieving Nigeria’s energy goals.

“Resolving the energy trilemma requires bold ideas, shared knowledge, and collective determination. Together, let us build a Nigeria where energy is secure, sustainable, and affordable for all.”

On NNPC Ltd.’s mandate to guarantee energy security as stipulated by the Petroleum Industry Act, 2021, Kyari said the Company has fostered partnerships and investments aimed at enhancing local production and generating revenue for economic diversification.

Reacting to claims that NNPC Ltd. is sabotaging the efforts of domestic refineries, Kyari said the NNPC Ltd. is part-owners of the Dangote Refinery, stressed further that such an investment is a strategic move aimed at strengthening domestic fuel supply.

 

 

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.