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Brent holds at $108

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LONDON – Brent crude futures held near $108 per barrel on Friday after strong US economic data renewed hopes of stronger global demand, but prices are still set to show the first monthly drop in four months on worries over faltering China’s consumption.

The European benchmark is poised to slip 2.6% in January after data this month showed China’s fuel consumption rose at its slowest clip in more than 20 years in 2013, Reuters reported.

Drawing strength from a cold spell and an improving economy, the US contract is set to end little changed, narrowing the difference between the two.

Brent crude slipped $0.15 cents to $107.80 a barrel by Thursday morning, after ending $0.10 cents higher in the previous session.

Trade was thin with a series of markets in Asia closed for the Lunar New Year holiday.

US oil shed $0.23 to $98. The spread held near the lowest settlement price since November 7.

“Global oil growth forecasts continue to get revised upwards, primarily driven by an improving US economy,” Sydney-based OptionsXpress market analyst Ben Le Brun reportedly said.

“That’s a good thing and will underpin oil prices. The markets should get used to the new reality of slowing growth in China.”

Despite strong support, gains in the dollar may put pressure on oil over the next few days, Le Brun reportedly said.

Brent faces support at around $105 and the US benchmark at $97 should they weaken from current levels, he said.

The US dollar traded at one-week highs against a basket of major currencies.

A strong dollar weighs on commodities such as oil that are priced in the currency.

“Oil has been marching to the beat of its own drum, but at the end of the day it is priced in the dollar,” said Le Brun. “So if we see some solid strength in the dollar, it will weigh on oil and other commodity prices.”

The dollar gained partly as US gross domestic product grew at a 3.2 percent annual rate in the final three months of last year.

While that was a slowdown from the third-quarter, it was a far stronger performance than had been anticipated earlier in the quarter.

Oil may also draw support from an improvement in Europe, which is expected to register slow and steady growth, helping offset the slow-down in consumption in China, he reportedly said.

Investors are also keeping an eye on the unfolding geopolitical crisis in Middle East and North Africa, key suppliers of oil to global markets.

Six suicide bombers burst into an Iraqi ministry building, took hostages and killed at least 24 people including themselves on Thursday before security forces regained control, security officials reportedly said.

While in Libya, the country will elect an assembly on 20 February to draft a constitution intended to advance transition to democracy and break political stalemate more than two years after a NATO-backed uprising toppled Muammar Gaddafi.

 

– 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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