Oil
Oil Futures Gain Ahead of Inventory Report
WASHINGTON – Oil futures held above $100 a barrel Wednesday ahead of a weekly government storage report, which is expected to show continued strong demand for petroleum products.
Light, sweet crude for March delivery rose $1.22, or 1.2%, to $101.16 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe gained 70 cents, or 0.6%, to $109.38 a barrel.
The U.S. Energy Information is set to release its weekly storage data for the week ended Feb. 7 at 10:30 a.m. EST.
Analysts are expecting the survey to show that crude-oil supplies rose by 2.5 million barrels last week, while gasoline stockpiles fell by 200,000 barrels and stocks of distillates, including heating oil and diesel fuel, dropped by 2.1 million barrels, according to a Wall Street Journal survey.
An unusually cold winter has boosted demand for heating oil, shrinking distillate stockpiles to multiyear lows for this time of year.
Market watchers are also looking for the report to show that stockpiles in Cushing, Okla., fell as a new pipeline allowed more oil to be moved out of the storage hub to refineries along the Gulf Coast. Because the Nymex contract is priced in Cushing, a decrease in Cushing stockpiles could boost the benchmark U.S. price.
The American Petroleum Institute, a trade group, said late Tuesday that its own data showed that inventories in Cushing fell by 2.5 million barrels last week, while overall crude-oil supplies rose by 2.1 million barrels. The front-month oil contract posted further price gains after the API report was released.
However, oil futures have risen more than 10% since hitting a recent low in early January, prompting some traders to question how much further prices can climb.
“We’re looking to see some sort of pullback here,” said Bill Baruch, senior market strategist with Chicago-based futures brokerage iiTrader. “A massive build in crude or distillates will help the market push lower.”
Meanwhile, Brent futures, the international benchmark, rose on news that Chinese imports of crude oil hit an all-time monthly high in January, according to preliminary customs data released Wednesday.
China is the number-two oil-consuming nation. Shipments of crude reached the equivalent of 6.66 million barrels a day in January, 12% above the year-ago level.
“The figures point to surprisingly robust oil demand in China, which should allay concerns that the dynamism of demand is weakening,” said Commerzbank in a note Wednesday. However, the bank noted that imports could have increased ahead of the Lunar New Year, when driving demand is especially strong.
Front-month March reformulated gasoline blendstock, or RBOB, recently rose 2.95 cents, or 1.1%, to $2.7821 a gallon. March diesel rose 2.12 cents, or 0.7%, to $3.0493 a gallon.
– WALLSTREET 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.