Oil
Oil Futures Rebound After Selloff
…Protests in Libya push Brent futures higher
NEW YORK – Oil futures moved higher Wednesday as traders paused following a steep selloff fueled by concerns over swelling supplies, while reports of protests in Libya lent more support to European prices.
Light, sweet crude for December delivery rose 55 cents, or 0.6%, to $93.60 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe climbed $1.31, or 1.2%, to $107.12 a barrel, ahead of expiration on Thursday. The more-actively traded January contract was up $1.24, or 1.2%, at $106.76.
The gains came a day after the U.S. benchmark, known as West Texas Intermediate, or WTI, sank 2.2%, posting its largest one-day decline in more than two months and settled at its lowest price in more than five months.
Market participants were spooked Tuesday by expectations of an eighth straight weekly increase in U.S. crude stockpiles amid week demand from refiners during maintenance season. Domestic inventories have risen by more than 8%, or 29.8 million barrels, over the past seven weeks. The Energy Information Administration will issue its report on Thursday, a day later than usual because of the Veteran’s Day holiday this week.
Investors are also concerned that the Federal Reserve may begin to unwind its $85-billion-a-month bond buying program next month, based on comments from officials at the central bank on Tuesday. The measure has given a lift to crude prices by weakening the dollar, making oil cheaper to buy with other currencies.
“We’re seeing some gains being held on to after a solid drubbing, specifically on WTI yesterday,” said Matt Smith, author of The Daily Distillation, an energy newsletter and an analyst at Schneider Electric SA (SU.FR), an energy- consulting firm.
He added that with a lack of inventory data today, “markets are more focused on the geopolitical side of things.”
Brent futures, considered by many analysts to be a gauge of world prices, rose higher than the U.S. benchmark after dozens of protesters blocked the entrance to Libya’sZawiya refinery. A Bloomberg News report said the unrest kept the 120,000 barrel-a-day refinery closed for more than a day, though it cited an unnamed Libyan official, who claimed the plant later reopened.
Strikes at Libya’s oil export terminals in recent months has sharply reduced the country’s crude production to a fraction of the 1.4 million barrels per day it pumped earlier this year. The disruptions have cut supplies to Europe and boosted Brent futures.
The on-going struggles to restore Libya’s production along with concerns over growing U.S. inventories widened Brent’s premium to the U.S. benchmark-futures contract to $14 a barrel earlier Wednesday, the biggest such spread since April 2.
Front-month December reformulated gasoline blendstock, or RBOB, recently gained 3.66 cents, or 1.4%, to $2.6230 a gallon. December heating oil rose 3.50 cents, or 1.2%, to $2.8882 a gallon.
– NASDAQ
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.
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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.
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.”
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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.