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Investors turn on Dollar

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WASHINGTON – As 2014 got underway, investors were confident the U.S. economy would build on gains made in 2013 and show signs of a stronger recovery this year. And a healthier economy was supposed to prompt the Federal Reserve to start raising short-term interest rates that have been held near zero since the financial crisis. Both trends were going to boost the dollar against other currencies.

It hasn’t happened that way. Instead, investors are turning on the dollar. Last week, there were more bearish bets on the greenback than bullish ones for the first time since October, according to data released Friday by the Commodity Futures Trading Commission.

The greenback has underperformed most developed-country currencies in 2014, including a 2.1% decline against the yen and 3.9% versus the Australian dollar.

Analysts say three months of mixed economic data muddied the U.S. economic picture and weighed on the dollar’s rise. The Fed is holding to its plan to cut bond purchases and eventually raise rates, but some investors don’t believe that course is as certain as it seemed a few months ago.

Investors had a net short bet of $305 million against the dollar as of March 25, according to the CFTC. In late January, they had a net long bet of $25.2 billion.

“Investors betting on the dollar’s appreciation haven’t had a great start to the year, giving them less capacity to take on big USD positions,” said Elsa Lignos, senior FX strategist at RBC Capital Markets.

The dollar is also facing headwinds from Europe and Japan. The euro is up against the dollar as investors doubt the European Central Bank will cut rates or enact other stimulus. The yen is in a similar boat, with some predicting the Bank of Japan will be less-aggressive than previously thought in its bid to boost inflation.

On Monday, the euro has strengthened against the dollar after consumer-price numbers in the euro zone in March rose less than expected. The euro traded at $1.3769, up 0.1%.

CFTC numbers for the week of March 25 showed that bets in favor of the euro fell 26% to $6.8 billion from $9.2 billion the previous week.

“Investors are shrugging off that euro inflation number,” Mr. Manimbo said. “Markets aren’t convinced the number is weak enough to spur action at the upcoming ECB meeting.”

The yen was down 0.2% on Monday, to 103.06, as Japan posted disappointing industrial production numbers for February.

 

– WALLSTREET JOURNAL

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

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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.

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FHC Orders NUPRC to Comply with PIA

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Local Firms Lead Revival of Idle Oil Wells – SPE

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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.”

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