Oil
Brent falls below $109
WASHINGTON – Brent futures fell below $109 per barrel on Monday as disappointing US economic data revived demand growth concerns at the world’s top oil consumer, but strong consumption of heating fuels due to a cold spell kept losses in check.
US manufacturing output unexpectedly fell in January, recording its biggest drop in more than four-and-a-half years, in the latest indication the economy got off to a weak start this year, Reuters reported.
Worries over consumption may keep the two oil benchmarks trading in a narrow range as investors await more data due later in the week to gauge the global demand outlook.
Brent crude slipped $0.15 to $108.93 per barrel by Monday morning, after gaining to $109.40, Reuters said.
US oil gained $0.28 to $100.58.
“I don’t expect oil to rise or fall much from current levels,” Newedge Japan commodity sales manager Ken Hasegawa told Reuters. “The market is now looking for more economic indicators to gauge the outlook for oil demand, particularly from the US and Europe.”
Hasegawa expects Brent to trade between $108.50 and $110 per barrel during the day, with the US benchmark swinging in a $99.50 to $101.20 range.
Prices are also likely to remain range-bound, with thin volumes, because of a holiday in the US on Monday.
The next set of key data is the HSBC flash PMI survey of manufacturers for February, due on Thursday.
US manufacturing joined weak retail sales and employment data in suggesting that cold weather had spurred a step-back in economic growth early in the first quarter after a strong performance in the second half of 2013.
Investors are also awaiting minutes of the February policy meeting of the Federal Reserve due on Wednesday.
Fed chair Janet Yellen also has to appear before the Senate after her testimony was postponed due to bad weather, but no firm date has been set as yet.
In addition to the cold spell that is boosting oil demand in what is seasonally a weak consumption period, crude futures drew support from the dollar, which languished at a six-week low against a basket of major currencies.
Support also came from better Chinese data that showed banks disbursed the highest volume of loans in any month in four years in January, a surge that suggests the world’s second-biggest economy may not be cooling as much as some fear.
Supply disruption fears continued to put a floor on prices.
Libya’s oil production has fallen to 390,000 barrels per day as protests have partly blocked flows from the El Sharara oilfield, the state National Oil Corp said.
Protesters led by a former anti-Gaddafi rebel have seized three oil ports in eastern Libya since August, cutting off around 600,000 bpd of export capacity, to demand more regional autonomy and a greater share of oil wealth.
– UPSTREAM
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.