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Brent holds above $107

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NEW YORK – Brent crude held steady above $107 per barrel on Friday, on track to end the week flat as tensions in oil producing regions supported prices against weak demand and plentiful supplies.

Oil prices have traded in a tight range this week with robust economic data from the US, China and the euro zone also failing to push prices higher.

“It is very unusual that big geopolitical events such as Iraq, Ukraine and Gaza, which normally are very sensitive to the price of oil, almost haven’t affected prices,” Ayers Alliance chief investment officer Jonathan Barrett told Reuters, noting that trading volumes have dropped off.

“The only conclusion we can draw is that the world is awash with oil,” he said.

Brent crude for September delivery traded 10 cents higher at $107.17 per barrel by Friday morning. The contract had closed $0.96 lower on Thursday.

US crude for September delivery was down $0.05 cents at $102.02 per barrel, after settling $1.05 lower.

Conflicts in Ukraine, Gaza and Iraq raged on, but failed to push prices higher as global supplies remained ample.

In Libya, oil production has risen to 500,000 barrels per day, but there is no progress on reopening Brega oil port after an agreement to end a protest there, a spokesman for state-run National Oil Corporation said.

Gazan authorities said Israeli forces shelled a shelter at a UN-run school on Thursday, killing at least 15 people as the Palestinian death toll in the conflict climbed higher than 760 and attempts at a truce remained elusive.

Members of the European Union on Thursday also considered proposals targeting state-owned Russian banks vital to Moscow’s faltering economy in what would be the most serious sanctions so far over the Ukraine crisis.

Further supporting oil prices, US Labor Department unemployment data suggested that the economic recovery remained on track, with initial weekly jobless claims falling to their lowest since February 2006.

“The market seems to be quite happy to be in a range,” Barrett said. “None of the big players are pushing [the market] around. And if you don’t have the volume in the market, it doesn’t create the opportunity for large movements.”

Oil inventories in Cushing, Oklahoma, fell another 163,000 barrels over the four days to 22 July data from Genscape Inc showed on Thursday, deepening a slump that has already dragged stockpiles to their lowest in six years.

Drawdowns at Cushing – delivery point for West Texas Intermediate contracts – have dropped stocks there to near what traders consider to be minimum operating levels, fuelling a sharp rise in prompt US crude oil prices.

The gap between US oil futures and Brent narrowed to as little as $4.47 this week, near a three-month low, although it widened again to $5.15 on Friday.

– UPSTREAM ONLINE

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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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