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Brent oil rises above $107 as outlook for demand growth improves

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WASHINGTON – Brent oil rose above 107 dollars a barrel on Wednesday as outlook reports indicated global oil demand will rise more quickly this year due to economic growth in industrialised countries.

Economic growth will absorb more supply even as U.S. shale oil output reaches record highs, the International Energy Agency (IEA) said on Tuesday.

Simultaneously, the International Monetary Fund (IMF) raised its global growth forecast for the first time in nearly two years, saying advanced nations could pick up growth from emerging markets.

Brent crude added 58 cents to 107.30 dollars a barrel. On Tuesday, oil hit a nearly two-week high of 108.00 dollars and ended 38 cents up.

U.S. oil was up 68 cents to 95.65 dollars a barrel to touch its highest in more than two weeks.

Brent oil rises above $107 as outlook for demand growth improves“Improvement in global industrial production will translate to higher energy demand,” Michael McCarthy, chief strategist at CMC Markets in Sydney said.

“Technical factors and better demand outlook are likely to keep oil prices supported.”

Oil demand growth has been boosted by a robust economic rebound in the U.S., where the IEA has revised up its 2013 demand estimate by 180,000 bpd to 18.9 million bpd.

The IMF also pointed to the U.S. as one of the bright spots for the global economy.

These forecasts and logistics will keep Brent supported at 105.50-106 dollars a barrel in the short term, and prices may bounce above those levels to about 108 dollars, McCarthy said.

The U.S. benchmark may rise to around 96.50 dollars.

Those levels may be the staging point for further gains in Brent to about 110 and 99.50 dollars in U.S. oil, McCarthy said.

Beyond the improving demand outlook, geopolitical tensions in the Middle East also continue to put a floor on oil prices.

With progress in talks between the West and Iran to end a decade-old nuclear dispute removing some of the risk, investors remain worried about Syria crisis spilling disrupting supplies.

“Supply disruption worries from the Middle East are still out there,” said a trader with a Western trading firm.

“They will continue to support oil prices.”

Investors are awaiting the latest oil inventory data from the U.S.

U.S. commercial crude oil inventories likely rose last week for the first time in eight weeks, by an average of 1.6 million barrels, a preliminary media poll showed.

In the refined products sector, distillate stocks, including heating oil and diesel fuel, were forecast to have dropped 400,000 barrels on average.

Gasoline stocks were seen to have increased by 1.6 million barrels last week.

The API will release its report on Wednesday. EST delayed a day due to the Martin Luther King Jr Day holiday on Monday.

EIA data is delayed to Thursday.

– REUTERS

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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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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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