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Oil Futures Fall on Glut of U.S. Supplies

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WASHINGTON – U.S. oil futures fell Friday, on track for their fourth consecutive weekly decline, amid concerns about high supplies and weak demand, while reports of some returning Libyan production pressured European prices.

Light, sweet crude for December delivery declined $1.08, or 1.1%, to $95.29 a barrel on the New York Mercantile Exchange. The U.S. benchmark, known as West Texas Intermediate, or WTI, has hovered near four-month lows this week and has lost more than 2% over the past three sessions.Brent crude on ICE Futures Europe was off $1.77, or 1.6%, at $107.10 a barrel.

OILU.S. oil stockpiles have risen nearly 8% over the past six weeks as refiners have curbed their crude processing amid seasonal maintenance work and waning gasoline demand.

While refiners’ operating capacity increased 1.4 percentage points in the week ended Oct. 25, refinery utilization of 87.3% last week is still down from above 90% in mid-September.

Government data next week is likely to show U.S. supplies at the end of October reached their highest level since 1930.

“It’s that same theme that we have had all week–the market is focused on on-going high production and an unrelenting build in inventories, said Matt Smith, author of energy newsletter Daily Distillation and an analyst at energy-consulting firm Schneider Electric SA.

“You got to think we’ll begin to see some bargain hunting after such a drop [in prices], but it doesn’t appear to be now,” he added.

On Wednesday, the Energy Information Administration reported said U.S. crude stockpiles rose by 4.1 million barrels last week to 383.9 million barrels. That is the highest level since late June, when crude last traded at current weak levels near $96.50 a barrel.

Meanwhile, domestic production has hovered near record highs, buoyed by hydraulic fracturing and horizontal drilling techniques, which have enabled energy producers to tap additional supplies in shale oil fields.Andy Lebow, senior vice president of energy futures at Jefferies Bache, said, “this is a supply story and it’s pressuring the market again here today.”

Traders also said that any rebound in Libyan production is another bearish development for the crude market. Strikes at the country’s oil export terminals has sharply reduced its output to a fraction of the 1.4 million barrels per day it pumped earlier this year.

On Thursday, Bloomberg News reported that Libyan production now stood at 350,000 to 400,000 barrels per day, and that its Sharara field may begin pumping crude again within 10 days. Sharara accounts for about 20% of the country’s output.

Front-month December reformulated gasoline blendstock, or RBOB, recently fell 3.21 cents, or 1.2%, to $2.5554 a gallon. December heating oil declined 5.15 cents, or 1.7%, to $2.9026 a gallon.

– WALL STREET JOURNAL

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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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ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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.”

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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.

 

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