Oil
Oil Falls as Stocks Climb After Iran Accord
… Bond Risk Declines
DUBAI – Iran agreed yesterday to curtail its nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals. Photographer: Behrouz Mehri/AFP via Getty Images
Oil and gold fell while stocks climbed to the highest level since 2008 after Iran and world powers reached an initial deal on the nation’s nuclear program. Bond risk declined and the yen weakened to a six-month low.
Brent crude tumbled 1.8 percent to $109.06 a barrel at 10:45 a.m. in London, heading for the biggest decline in three weeks. Gasoline and heating oil slumped at least 1.6 percent. Gold fell as much as 1.5 percent to a four-month low. The MSCI All-Country index of stocks advanced 0.2 percent and futures on the S&P 500 Index (SPX), which capped a seventh weekly gain Nov. 22, rose 0.3 percent. Japan’s currency slid 0.5 percent against the dollar. Corporate bond risk fell to the lowest in more than 3 1/2 years.
Iran agreed yesterday to curtail nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals, an accord that broke a decade-long deadlock. The deal, which releases some of Iran’s oil assets, spurred a rally in airlines, while Valeo SA and Continental AG led car-parts makers higher. U.S. pending home sales probably rebounded in October, economists said before a report today.
“Some of the risk premium has been taken out because of the Iran deal,” Henk Potts, who helps oversee about $310 billion as a strategist at Barclays Wealth & Investment Management in London, said by phone today. “Sanctions have been hitting Iran oil dramatically. There is hope that in the long term the supply dynamics will improve. High commodity prices are one of the key costs to businesses and consumers so a decline in oil equates to lightening up the tax burden.”
Brent slid from a six-week high to the lowest since Nov. 21. West Texas Intermediate oil dropped 1.5 percent to $93.46 a barrel. Heating oil declined 1.6 percent to $2.9936 a gallon, while gasoline fell 1.7 percent to $2.6789 a gallon.
Gold Slides
Gold dropped to as low as $1,225.55 an ounce following last week’s 3.6 percent decline, the steepest weekly slump since September. Silver slid 0.6 percent and reached the lowest price since Aug. 8.
The Stoxx Europe 600 Index climbed 0.5 percent as almost four shares advanced for every one that declined. Air France-KLM (AF) Group, Europe’s biggest airline, advanced 1.2 percent. Deutsche Lufthansa AG, the second-largest in the region, increased 1.5 percent. Thomas Cook Group Plc rose 2.6 percent. Continental, Europe’s second-largest auto-parts maker, gained 1.7 percent. Valeo, France’s second-biggest maker of car parts, rose 1.5 percent.
PSA Peugeot Citroen gained 3.9 percent after people familiar with the matter said its chief executive officer plans to step down next year. Europe’s second-largest carmaker is also likely to benefit from the Iran accord as the country was Peugeot’s biggest market after France prior to the trade sanctions.
Medicare Payments
Fresenius Medical Care AG climbed 8.3 percent after U.S. regulators scrapped a plan to cut Medicare payments next year. Fresenius SE, which holds 31 percent of Fresenius Medical Care, rallied 4.1 percent.
The S&P 500 jumped 27 percent this year and ended last week at 1,804.76, its highest level ever.
A report later today may show that pending home sales in the U.S. increased 1.1 percent in October, following a 5.6 percent drop a month earlier, according to the median of 34 estimates in a Bloomberg survey of economists.
The MSCI Emerging Markets Index rose for a second day, adding 0.5 percent. Benchmark gauges in India and Turkey climbed more than 1.5 percent. The Turkish lira and Indian rupee strengthened at least 0.4 percent against the dollar, while Russia’s ruble weakened 0.4 percent.
The Shanghai Composite Index slipped 0.5 percent, led by energy producers, after an explosion at a China Petroleum & Chemical Corp. pipeline and crude oil fell. China Petroleum, also known as Sinopec, slumped 4 percent, the most in five months.
Protests Escalate
Thailand’s SET index fell 0.5 percent and the baht slid 0.5 percent to a 10-week low. Anti-government protests spread to military bases, government offices and television stations today after more than 100,000 people joined rallies yesterday against Prime Minister Yingluck Shinawatra.
The yen slid as much as 0.7 percent to 101.92 per dollar and a four-year low of 137.99 per euro as demand for the safety of Japan’s currency waned.
The euro weakened 0.4 percent to $1.3510, extending declines after European Central Bank Governing Council member Ardo Hansson said the bank stands ready to cut borrowing costs further and is technically prepared to make its deposit rate negative.
Oil Producers
The Norwegian krone slid 0.7 percent to 6.1031 per dollar and the Canadian dollar depreciated 0.4 percent to C$1.0560 per U.S. dollar as currencies of oil-producing nations declined.
German government bonds rose, pushing 10-year yields two basis points lower to 1.73 percent. The rate on 10-year Treasury notes was little changed at 2.75 percent. Spain’s 10-year yield climbed three basis points to 4.13 percent.
The cost of insuring against losses on corporate bonds fell, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies decreasing 1.5 basis points to 78 basis points, the lowest since April 2010. The Markit iTraxx Crossover Index of contracts on 50 high-yield companies declined 4.7 to 324, the lowest since October 2007.
– BLOOMBERG
The Nigerian National Petroleum Company Limited (NNPC) has unveiled a bold strategy to reduce methane emissions in the oil and gas sector by 60% by 2031, with an ultimate goal of achieving net-zero emissions by 2060.
This announcement reinforces Nigeria’s leadership role under the Global Methane Pledge initiative and its commitment to tackling climate change.
The Group Chief Executive Officer of NNPC, Mele Kyari, disclosed these plans during a meeting on Thursday with Robert Leahman, the U.S. State Department’s Global Methane Program Manager, and a delegation from Deloitte.
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The discussions, held at the NNPC Towers in Abuja, focused on collaborative efforts to reduce methane emissions through innovative and sustainable practices.
“Reducing methane emissions is not just an environmental necessity but also a strategic imperative for Nigeria’s energy transition. We are leveraging partnerships to adopt global best practices and innovative solutions,” Kyari stated.
Key among these efforts is a pilot project in the Niger Delta, aimed at establishing emissions baselines, mitigating methane leaks, and promoting sustainable operations across Nigeria’s energy sector.
The project, a partnership between NNPC, Deloitte, and the U.S. Bureau of Energy Resources, will utilize data-driven methodologies to pinpoint and address methane hotspots.
Robert Leahman commended Nigeria’s proactive stance, describing it as a benchmark for other nations on the continent.
“Nigeria’s leadership under the Global Methane Pledge sets a standard for the continent. These initiatives will not only help reduce emissions but also drive sustainable development in the energy sector,” he said.
Kyari highlighted the broader benefits of addressing methane emissions, noting its significance for both environmental protection and economic efficiency.
“This collaboration is a game-changer. By addressing methane leaks, we’re reducing waste, saving costs, and protecting the environment. It’s a win-win for our economy and the planet,” he added.
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.
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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