Oil
Oil Futures Edge Higher After Selloff
…Libyan Violence Supports Prices
NEW YORK – U.S. oil futures moved higher Friday as investors paused following a selloff that sent domestic prices to their biggest decline in two weeks, while Brent crude gained on reports of an explosion at a Libyan weapons depot.
Light, sweet crude for January delivery rose 52 cents, or 0.6%, to $92.82 a barrel on the New York Mercantile Exchange. The U.S. contract, known as West Texas Intermediate, or WTI, declined to a near six-month low on Wednesday.
U.S. markets were closed on Thursday because of the Thanksgiving holiday and trading volume was lighter-than-usual Friday, with the Nymex scheduled to close an hour early.
Market participants have sent U.S. prices down nearly 15% since late August amid rising supplies. Over the past 10 weeks, stockpiles have grown by 35.8 million barrels, or 10%, as production has hovered near 20-year highs.
On Wednesday, the Energy Information Administration said that U.S. crude inventories climbed by 3 million barrels last week, an increase far greater than analysts had expected. Total supplies now stand at 391.4 million barrels, the highest such level since late June.
“It looks like [WTI] is just recovering today,” said Andrew Lebow, senior vice president of energy futures at Jefferies Bache LLC in New York.
“Clearly, the [EIA] numbers were bearish for crude,” he added.
The Wall Street Journal reported that members of the Organization of the Petroleum Exporting Countries disagree over whether to cut the cartel’s oil output in the coming months, amid booming U.S. production, a resurgence in Iraqi exports, and the potential return of Iranian crude to world markets.
While OPEC hasn’t changed its production ceiling in two years, some members are pushing for a cut in output next year, The Wall Street Journal said, citing people familiar with the debate.
Production here in the U.S. has soared due mainly to hydraulic fracturing and horizontal drilling techniques, which have enabled energy producers to extract supplies trapped in shale-oil fields.
“At some point, [OPEC] will have to start talking about production cutbacks,” Mr. Lewbow said.
The oil cartel is scheduled to meet in Vienna on Dec. 4.
Meanwhile, Brent crude on ICE Futures Europe, considered by analysts to be a gauge of world oil prices, rose 3 cents, to $110.89 a barrel.
The European benchmark was supported somewhat by the news that an explosion Thursday killed more than 40 people at an army depot in southern Libya. The blast occurred after local residents reportedly tried to steal ammunition from the site.
The violence represents the latest instance of turmoil in Libya, which has struggled to restore its oil production to prior levels after strikes at its crude export terminals nearly crippled its output. With the labor unrest, Libya’s oil production has declined sharply to a fraction of the 1.4 million barrels per day the country pumped last spring.
Front-month December reformulated gasoline blendstock, or RBOB, recently fell 0.83 cents, or 0.3%, to $2.6900 a gallon ahead of expiration at settlement. The more actively traded January contract declined 0.60 cents, or 0.2%, to $2.6886 a gallon.
December heating oil, which also expires Friday, rose 0.56 cents, or 0.2%, to $3.0525 a gallon, while the January contract added 0.14 cents to $3.0443 a gallon.
– WALL STREET JOURNAL
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.”
Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy
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.