Oil
Brent Crude Trades Near $70 as Traders Assess OPEC Decision
Futures pared advances of as much as 1.3 percent in London and 1.6 percent in New York. The global benchmarks fell 18 percent last month after the Organization of Petroleum Exporting Countries maintained its output target at 30 million barrels a day, opting to let low oil prices force U.S. shale producers to cut supply. Saudi Arabia won’t give up market share “at this time for anybody,” said Prince Turki Al-Faisal, the kingdom’s former intelligence chief.
Demand growth is slowing as the U.S. pumps the most oil in more than three decades, driving crude into a bear market. OPEC, responsible for about 40 percent of the world’s supply, resisted calls from members including Venezuela to reduce its quota at the Nov. 27 meeting in Vienna.
“The market is still trying to find its feet following the OPEC meeting last week,” Jens Naervig Pedersen, a commodities analyst at Danske Bank A/S, said by e-mail from Copenhagen today. “There seems to be some short-term support around the $70 to $72-a-barrel mark for Brent. But overall the market is still plagued by uncertainty.”
Brent for January settlement slipped 17 cents to $70.37 a barrel on the London-based ICE Futures Europe exchange, having earlier climbed 92 cents to $71.46. It dropped $2 yesterday to $70.54. The European benchmark crude traded at a premium of $3.42 to WTI. Prices are down 36 percent this year.
U.S. Stockpiles
WTI for January delivery climbed as much as $1.09 to $67.97 a barrel in electronic trading on the New York Mercantile Exchange, before paring the increase to $67.06. The contract declined $2.12 to $66.88 yesterday. Total volume traded was in line with the 100-day average for the time of day.
U.S. crude inventories shrank by 6.5 million barrels last week, the industry-funded American Petroleum Institute reported yesterday, according to Anthony Headrick, an analyst at CHS Hedging. An Energy Information Administration report today may show supplies expanded by 1.75 million, the median estimate in a Bloomberg News survey of eight analysts shows.
Production in the U.S., the world’s biggest oil consumer, increased to 9.08 million barrels a day through Nov. 21, said the EIA, the Energy Department’s statistical arm. That’s the fastest pace in weekly records that started in January 1983.
Drowning Market
Oil producers outside OPEC are “drowning” the market, Kuwait’s Oil Minister Ali al-Omair told parliament, according to the state news agency Kuna. The country won’t take a unilateral decision to boost prices or sacrifice its interests by cutting output, he said.
Iraq, OPEC’s second-largest producer, reached a deal with Kurdish authorities to export oil through Turkey. It will ship as much as 550,000 barrels a day from northern Iraq to the Mediterranean port of Ceyhan along a pipeline operated by the Kurds, according to Safeen Dizayee, a spokesman for the Kurdish Regional Government. The pact will entrench the global supply surplus, predicted BNP Paribas SA.
Saudi Arabia might consider reducing output if there were “reasonably guaranteed oversight” of quotas and assurances that other countries wouldn’t take the kingdom’s market share, Al-Faisal said at an event in London yesterday.
“We’ve tried that in the past,” he said. “Unfortunately other producers took advantage of — not just Saudi cutbacks — but other states that have cut, like U.A.E. and Kuwait.”
OPEC exceeded its collective target for a sixth straight month in November, even after reducing supply. The 12-member group pumped 30.56 million barrels a day, 424,000 barrels a day less than in October, according to a separate Bloomberg survey of oil companies, producers and analysts. It’s next scheduled to meet on June 5.
Bloomberg-
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.
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.
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.
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