Oil
Oil Futures Waver After Inventory Report
NEW YORK – Crude-oil futures wobbled Wednesday after government data showed an increase in crude-oil supplies but a shrinking storage glut in Cushing, Okla., where the benchmark futures contract is priced.
Light, sweet crude for March delivery recently traded down 5 cents at $97.14 a barrel on the New York Mercantile Exchange, down from nearly $98 in earlier trading. Brent crude on ICE Futures Europe slid 7 cents, or 0.1%, to $105.71 a barrel.
U.S. crude oil supplies rose by 400,000 barrels in the week ended Jan. 31, according to the U.S. Energy Information Administration. Analysts had expected the EIA to report that crude-oil supplies rose by 2.2 million barrels, according to a Wall Street Journal survey.
However, the smaller-than-expected rise could be attributed to a large drop in imports owing to inclement weather, said Kyle Cooper, managing director of research for IAF Advisors in Houston.
Imports of commercial crude oil fell by 1.2 million barrels to 6.887 million barrels, their lowest level since the week ended Dec. 6.
“There were some Houston ship channel problems, so those imports will probably…rebound,” Mr. Cooper said. “Crude stocks will get the build we anticipated this week next week.”
Stockpiles in Cushing fell by 1.5 million barrels to 40.3 million barrels, the lowest level since the week ended Dec. 27.
The report was the first to include an entire week in which the southern leg of TransCanada Corp.’s Keystone XL pipeline was in operation. The pipeline started commercial service to transport crude oil from Cushing to the Gulf Coast on Jan. 22.
U.S. oil production has boomed in recent years, as hydraulic fracturing and horizontal drilling techniques have enabled energy producers to tap into supplies trapped in shale-oil fields. However, without sufficient transportation capacity connecting the new sources of oil to existing refineries, much of that supply has been stuck in storage in Cushing. The storage glut in Oklahoma has kept U.S. oil prices below the price of Brent oil, the international benchmark, in recent years.
The new pipeline leg is projected to transport 520,000 barrels a day on average this year.
Stocks of distillates, including heating oil and diesel fuel, fell by 2.4 million barrels, the EIA said. Analysts had expected a 2-million-barrel drop. Frigid temperatures have boosted heating-oil usage, especially in the Northeast, home to the majority of U.S. households that use heating oil.
Front-month March diesel recently traded up 0.45 cent, or 0.2%, to $2.9874 a gallon.
Gasoline supplies rose by 500,000 barrels, compared with expectations for a 1.1-million-barrel increase.
March reformulated gasoline blendstock, or RBOB, recently rose 1.1 cents, or 0.4%, to $2.6141 a gallon.
Refining capacity utilization fell 2.1 percentage points to 86.1% of capacity, the lowest level since the week ended Oct. 18. Analysts had expected the operating rate to drop by 0.5 point in the week.
– WALLSTREET 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.
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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.