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Brent rises above $109

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NEW YORK – Brent crude oil rose above 109 dollars a barrel on Monday as U.S. jobs figures pointed to healthy economic growth , other data and higher oil demand from China.

Expectations of increased fuel demand added support to an oil market already bolstered by the loss of crude exports from Libya.

In Libya, violence and civil turmoil have cut oil output by more than one million barrels per day (bpd) from pre-war levels.

The Ukraine crisis is also a worry for markets in the West that rely heavily on oil and gas exports from Russia.

Brent was up 50 cents at 109.11 dollars, after settling down 18 cents and declining 0.7 per cent last week.

U.S. oil rose 50 cents to 103.16 dollars, extending gains after ending 18 cents up on Friday.

“Good overall economic data and healthy U.S. data are supporting oil,” said Tetsu Emori, a commodity fund manager at Astmax Investment. “And we have had geopolitical worries that have kept oil supported.”

China’s exports gained steam in May and beat forecasts on firmer global demand, rising seven per cent from a year earlier and quickening from April’s increase of 0.9 per cent.

The strong gains overshadowed an unexpected fall in imports that could signal weaker domestic demand.

The Chinese data followed U.S. figures showing employment returning to its pre-recession peak, confirming steady improvement in the world’s top economy.

May marked a fourth straight month of U.S. job gains above 200,000, a stretch last seen in January 2000.

The U.S. data helped bolster Asian shares to their highest levels in nearly three years, a follow-up to Friday’s record close on Wall Street.

China, imported 26.08 million tonnes, or 6.14 million bpd of crude oil in May, bringing total shipments in the first five months of this year to 128.7 million tonnes.

China is the world’s largest consumer of energy.

Some of China’s oil appears to have been going into storage.

China’s slackening economy, set to grow at its slowest pace in 23 years, has blunted its oil demand.

It’s oil demand dropped to a seven-month low in April, as refineries scaled back production for maintenance and exported surplus fuel.

“Imports so far were more affected by state stockpiling, as China brings new strategic petroleum reserves sites online,” Sijin Cheng, an analyst at Barclays, said in a note.

The Organisation of the Petroleum Exporting Countries meets in Vienna this week and is likely to keep an output target of 30 million bpd.

Members of the cartel, which pumps a third of the world’s oil, are happy with oil prices and producing enough to cover most of their budget needs.

“We expect no change to the joint 30 million bpd output with a muted market reaction,” VTB Capital oil and commodities strategist Andrey Kryuchenkov said.

– 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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