Business
Dollar steadies at higher levels as bonds fall
LONDON – The dollar upbeat on rate on Thursday and stocks and bonds fell across the globe as investors positioned for U.S. interest rates to rise sooner and faster than previously thought.
Global stocks as measured by the MSCI world equity index dropped 0.6 percent, adding to the previous day’s losses after Federal Reserve Chair Janet Yellen said the U.S. central bank might end its bond-buying program this autumn, and could start to raise interest rates around six months later.
Combined with a slight rise in the projected path for rates by Fed members, that led the market to bring forward the likely timing of the first hike in U.S. rates by a couple of months.
The whiplash was felt most in the short end of the Treasury market which is more sensitive to the course of the Fed funds rate. Yields on two-year notes shot up 8 basis points on Wednesday to 43 basis points, the sharpest single-day rise since mid 2011, and were trading at 42 bps on Thursday.
European stocks .FTEU3 dropped 0.4 percent on Thursday, following losses of more than 1.5 percent in Japan .N225 and other Asian markets. .MIAPJ0000PUS
Yellen sought to use her news conference to emphasize that rates would stay low for a while and rise only gradually, but the message was lost on skittish markets.
Her words led the futures market for the U.S. Fed funds rate to shift to pricing in around a 50-50 chance of the first hike in May to June next year. The timing had been July to August beforehand.
Yet many were not convinced the timetable had moved much at all. A Reuters poll of 17 primary dealers found 10 still expected the first hike to come in the second half of 2015, and four were still tipping 2016.
“Looking at the performance of markets this morning, there is no real followthrough,” said Simon Derrick, a currency strategist with Bank of New York Mellon.
“People are looking for reasons why the range should break. I don’t think Yellen was the thing to do it.”
Yields on 10-year notes were at 2.76 percent, having risen 9 basis points on Wednesday. German Bund futures, the benchmark for European bonds, fell 60 ticks.
The rise in U.S. yields in turn helped lift the dollar and sent the euro reeling back a full cent on Wednesday. But the dollar steadied at $1.3826 on Thursday. Against a basket of major currencies, the dollar was holding at 79.993 .DXY after adding 0.8 percent on Wednesday.
The U.S. currency was slightly up at 102.42 yen, having jumped a full yen on Thursday and away from important chart support in the 101.20/30 zone.
The dollar’s gains were gold’s undoing, sending the metal down to three-week lows of $1,319.61 an ounce.
The prospect of rising rates in the United States has not been good for some emerging markets as it threatens to draw capital away, pressuring equities and currencies.
Emerging stocks .MSCIEF fell more than 1 percent on Thursday to the week’s lows, within sight of their worst level in six-weeks.
The rate rise expectations also come as China seems to be weakening its yuan as a way to support a slowing economy, which puts pressure on other nations in the region to lower their currencies to stay competitive on exports.
The yuan skidded 1.33 percent below the daily midpoint fixing to its lowest in a year at 6.2275 per dollar, a long way from where it started the year at 6.0515 and a huge move for the normally tightly-controlled currency.
Last weekend, the People’s Bank of China (PBOC) doubled the daily trading band allowed for the yuan to 2 percent from the mid-point that it sets each day.
In oil markets, Brent futures fell 21 cents to six-week lows of $105.62 per barrel, while U.S. crude oil added 2 cents to $100.39.
– REUTERS
Business
Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd
Enhanced adoption of artificial intelligence and other digital technologies to improve operations in Nigeria’s oil and gas industry is taking the centre stage in relevant circles.
The issue came up strongly when the President-elect of the Nigerian Institute of Petroleum and Gas Engineers NIPetGE, Prisca Kanebi, paid a courtesy call at the Nigerian National Petroleum Company Limited (NNPC Ltd), Abuja.
Biztellers reports that the Kanebi led delegation was received by the Group Chief Executive Officer of the NNPC Ltd, Bayo Ojulari, represented by the Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye.
According to a statement made available on Sunday, discussions at the meeting focused on the future of Nigeria’s hydrocarbon industry amid global energy transition concerns, technological changes and sustainability targets.
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The statement indicated that the NNPC Ltd acknowledged the role of NIPetGE in policy advocacy, technical development and innovation within the sector.
Speaking during the meeting, Kanebi highlighted recommendations from the institute’s recent conference, including the proposed establishment of a national centre for intelligent energy systems to support the deployment of artificial intelligence, the Internet of Things and robotics across the petroleum value chain.
She also commended the Federal Government’s decarbonisation efforts and reiterated the institute’s support for policies aimed at improving sustainability in the industry.
The institute also recommended the creation of a hydrocarbon-linked emissions trading system to allow Nigeria to take part in global carbon markets.
The institute also proposed fiscal incentives to support local manufacturing and service delivery in the oil and gas sector, as well as the expansion of the Energy Transition Plan to include measurable upstream decarbonisation targets backed by tax credits.
Other proposals included increased public-private partnerships in emission control infrastructure, carbon capture projects and hybrid renewable energy initiatives.
Both organisations also stressed the need for stronger collaboration between industry and academic institutions to improve professional capacity and align petroleum engineering practice in Nigeria with international standards.
The institute further disclosed that its bill seeking chartered status had passed second reading and was progressing towards a third hearing at the National Assembly.
It added that NNPC Ltd pledged support for future collaborations with the institute on initiatives aimed at improving efficiency and innovation in the energy sector.
Business
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Business
Local Firms Lead Revival of Idle Oil Wells – SPE
Nigeria’s indigenous oil and gas companies are reopening dormant wells and ramping up production from assets acquired from international oil companies (IOCs) to boost crude oil output.
The Society of Petroleum Engineers (SPE), Nigeria Council, made the assertion through its Chairman, Francis Nwaochie, on the sideline of the Offshore Technology Conference (OTC) which ended at the weekend in Houston, Texas.
Nwaochie said indigenous operators were already taking advantage of opportunities created by disruptions in the global energy market to increase production from existing assets.
According to him, local firms that recently acquired onshore and shallow water assets from IOCs were aggressively reviving inactive wells and maximizing available infrastructure to raise output levels.
“What we are seeing now is that indigenous companies are reopening wells from the assets they acquired from the IOCs. Some of them have almost doubled production from those existing assets,”.
He explained that the renewed focus on dormant wells and existing facilities had become critical at a time the global oil market was facing supply shortages triggered by geopolitical tensions in the Middle East.
The SPE Nigeria Council Chairman noted that Africa, particularly Nigeria, was well positioned to benefit from the supply gap because of the continent’s relative stability compared to some other oil-producing regions.
“There is a huge opportunity for Africa right now. The focus is gradually shifting to Africa because of the volatile environment in many other producing regions.”
He stated that indigenous operators were leveraging digital technologies, financing opportunities and local expertise to improve production efficiency and optimise existing fields.
He added that stronger implementation of local content policies was also helping to create a more stable operating environment for oil and gas investments.
“Local content is very critical. Once communities and local companies clearly understand their roles and benefits, then you create peace across the industry. Business only thrives in peaceful environments.”
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Nwaochie also stressed the need for Nigeria to move beyond crude oil production and begin developing indigenous technologies for the energy industry.
According to him, SPE Nigeria Council was actively supporting innovation and technology development among young Nigerian engineers and researchers.
He disclosed that the association was engaging the National Universities Commission(NUC) on reforms to engineering curricula in universities to better prepare graduates for the future of the energy industry.
“One of our major focuses in SPE is technology development. We should not only import machines and equipment, we must begin to develop our own technologies locally.”
Nwaochie revealed that SPE was already supporting local innovators working on technologies such as remotely operated underwater vehicles (ROVs), noting that indigenous technology development will strengthen Nigeria’s economy and deepen local participation in the oil and gas sector.
“We may not get everything right immediately but we must start somewhere. That is how countries that dominate the global energy industry built their capacities.”





