Connect with us

Business

Euro touches eight-month low as European shares fall

Published

on

LONDON – The euro hit an eight-month trough against the dollar on Wednesday and German bond yields were at record lows ahead of inflation data expected to boost the case for further European Central Bank policy easing.

Investors were also awaiting a statement from the Federal Reserve following its policy meeting that some expect to signal a more hawkish policy outlook, and data likely to show the U.S. economy bouncing back strongly in the second quarter.

European shares dipped after French oil major Total (TOTF.PA) was hit by concerns over its investments in Russia following Tuesday’s tightening of European sanctions on Moscow after the downing of an airliner in neighboring Ukraine.

The euro fell to $1.3395, its lowest since November 2013, before recovering to $1.3400, down around 0.1 percent on the day EUR= after data showing Spanish consumer prices fell 0.3 percent in July from a year before.

The surprisingly big fall came even though figures released at the same time showed Spanish economic growth hit its fastest since before the financial crisis in the second quarter.

Traders said that if German inflation data, due at 1200 GMT (8.00 a.m. EDT), also came in below forecast, it would intensify pressure on the ECB to print money to support growth and avert deflation risks. ECONES ECONDE

The ECB cut all its interest rates in June and promised up to 1 trillion euros in cheap long-term loans to banks from September, but kept the door open to a program of large-scale asset purchases, known as quantitative easing (QE).

“The likelihood that the ECB will need to do QE at the end of the year is sharply increasing,” said Alessandro Giansanti, senior rate strategist at ING.

DIVERGING FORTUNES

The contrast between the moribund euro zone economy and an increasingly robust U.S. recovery is one factor in the dollar’s rise this week to a six-month high against a basket of six major currencies. The dollar index was last at 80.225 .DXY, after touching 81.245 on Tuesday as the euro cratered.

The Commerce Department is expected to report on Wednesday that the economy grew at a 3.2 percent annual pace in the second quarter, after it shrank 2.9 percent in the previous quarter.

Federal Reserve chair Janet Yellen is not due to hold a news conference after the U.S. central bank’s two-day meeting, and the Fed will not update its economic forecasts, leaving a statement scheduled for release at 1800 GMT as investors’ focus.

On Friday, the Labor Department’s key nonfarm payrolls report is expected to show a rise of 231,000 jobs in July after an increase of 288,000 in June. The jobless rate is expected to hold steady at 6.1 percent.

With U.S. unemployment dropping over the last few months and inflation firming, some believe the Fed could adjust its wording to suggest a willingness to hike interest rates sooner rather than later as the bank approaches its “full employment” mandate.

The yield on the benchmark 10-year U.S. Treasury note US10YT=RR stood at 2.467 percent, not far from its U.S. close of 2.462 percent on Tuesday, when it got support from German, Italian and Spanish government debt yields hitting record lows.

“That widening yield spread differential is beginning to weigh more heavily on the euro,” said Lee Hardman, a currency economist at the Bank of Tokyo-Mitsubishi UFJ.

RUSSIAN SANCTIONS

European shares bucked the upward trend in Asian markets. French oil major Total TOTF.PSA slid after saying it had stopped buying shares in Russia’s Novatek (NVTK.MM) on the day a Malaysia Airlines flight was downed over Ukraine.

Last April, Total forecast that Russia would become its biggest source of oil and gas output by 2020 thanks to its partnership with Novatek and their Yamal LNG project in Siberia.

Tuesday brought further European and U.S. sanctions against Russia over Moscow’s support for rebels in eastern Ukraine.

The FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent at 1,370.92 points, after gaining 0.3 percent on Tuesday.

Asian shares touched a six-and-half-year peak, with Japan’s Nikkei stock average .N225 ending up 0.2 percent, as upbeat earnings offset weaker-than-expected industrial production data which cast doubts over the strength of an expected third-quarter economic recovery.

U.S. crude CLc1 edged up around 0.1 percent on the day to $101.07 a barrel after touching an intraday low of $100.37 on Tuesday, its lowest since mid-July.

Spot gold XAU= was steady at $1,299 an ounce after slipping 0.5 percent and breaking below the key $1,300 level in the previous session.

– REUTERS

Click to comment
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Business

Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd

Published

on

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.

ALSO READ: NNPC Ltd, IOCs Raise Crude Supply to Local Refineries by 103% in 4 Months

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.

Continue Reading

Business

FHC Orders NUPRC to Comply with PIA

Published

on

Continue Reading

Business

Local Firms Lead Revival of Idle Oil Wells – SPE

Published

on

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.”

ALSO READ: Nigerian Navy Recovers Large Cache of Illegal Refined Petroleum Products

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.”

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.

0
Would love your thoughts, please comment.x
()
x