Oil
Brent holds above $109
WASHINGTON – Brent crude was little changed on Tuesday, staying above $109 a barrel, as robust demand for heating purposes from North America and a weak dollar offset concerns over disappointing US data.
Brent crude was trading at $109.08 a barrel early on Tuesday, holding just below Monday’s close of $109.18 – the highest settlement since 7 February.
US crude was up 42 cents at $100.72 a barrel. There was no settlement on Monday as US markets were shut for the Presidents’ Day holiday.
“There’s obviously general support from the cold weather and support is also coming from the US dollar weakness,” said Ric Spooner, chief analyst at CMC Markets in Sydney.
“On the other hand, the general run of disappointing economic statistics from the US including retail sales and non-farm payroll was probably a consequence of cold weather.
“Market will be more comfortable when we get through the cold weather and see those figures return to trend levels.”
A slew of disappointing US data pinned the dollar near six-week lows against a basket of currencies on Tuesday, while investors will scour the minutes of Federal Reserve’s last policy meeting on Wednesday and China’s manufacturing data on Thursday for clues on the health of the global economy.
A weak dollar supports commodities priced in the greenback by making them cheaper for holders of other currencies.
Oil prices also drew support from a report that showed developed countries started the year with the lowest oil inventories since 2008.
Oil inventories in the developed world plummeted by 1.5 million barrels per day in the last three months of 2013, the steepest quarterly decline since 1999, the International Energy Agency (IEA) said in its monthly report last week.
The oil demand outlook for 2014 has also improved as global agencies the IEA, Opec and the US Energy Information Administration have all raised their forecasts on stronger economic growth in Europe and the US.
Political instability in Libya added to global supply concerns. Libya’s oil production has dropped to 390,000 bpd, some 70,000 bpd less than last week, as protests have partly blocked flows from the El Sharara oilfield, the state National Oil Corporation said.
On Tuesday, Iran and the world powers will start negotiations to strike a long-term nuclear deal.
A positive outcome would be negative for oil as sanctions on Tehran would ease, allowing the Opec producer to export more crude and add to global supply.
“The market’s attitude is to react to news as they unfold,” Spooner said.
“If there is any advance or any progress on lifting sanctions, that would be a positive for supply.”
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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.