Oil and Gas
US oil prices collapse to $12 after 21 years, as world awash with crude
US oil prices dived to 21-year lows Monday, giving up more than 30 percent in a market flooded with crude and hit by evaporating demand in the face of the coronavirus pandemic.
The US benchmark West Texas Intermediate (WTI) crude for May delivery tanked more than 32 percent to $12.41 — the lowest level since 1999.
Trade, however, and the very sharp losses were technically driven as investors closed out their positions ahead of the May contract expiry due later Monday so that they would not be obliged to actually take delivery of the oil.
“The real problem of the global supply-demand imbalance has started to really manifest itself in prices,” said Rystad Energy analyst Bjornar Tonhaugen.
“As production continues relatively unscathed, storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices.”
The European benchmark contract, London Brent North Sea oil for June delivery, was meanwhile down 3.8 percent at $27.01 per barrel.
Signs that the coronavirus may have peaked in Europe and the United States failed to lift Asian and European financial markets generally.
Traders are instead becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.
Analysts said this month’s agreement between OPEC and its peers to slash output by 10 million barrels a day was having little impact because of the virus lockdowns and travel restrictions that are keeping billions of people at home.
WTI was hit particularly hard as its main US storage facilities in Cushing, Oklahoma, were filling up, with Trifecta Consultants analyst Sukrit Vijayakar saying refineries were not processing crude fast enough.
There are also plenty of supplies from the Middle East with no buyers as “freight costs are high”, he told AFP.
Some analysts predict that WTI could soon test 1998 lows of just $11.
AxiCorp’s Stephen Innes said: “It’s a dump at all cost as no one… wants delivery of oil, with Cushing storage facilities filling by the minute.
“It hasn’t taken long for the market to recognise that the OPEC+ deal will not, in its present form, be enough to balance oil markets.”
Stock markets were mostly lower despite governments starting to consider how and when to ease the lockdowns that have crippled the global economy.
Italy, Spain, France and Britain reported drops in daily death tolls and slowing infection rates, while Germany began allowing some shops to reopen and Norway restarted nurseries.
– ‘No time to get cocky’ –
In the US, Andrew Cuomo, governor of badly hit New York state, said the disease was “on the descent”, though he cautioned it was “no time to get cocky”.
Mounting evidence suggests that the lockdowns and social distancing are slowing the spread of the virus.
That has intensified planning in many countries to begin loosening curbs on movement and easing the crushing pressure on national economies.
Investors are keeping an eye on Washington, where Congress and the White House are working towards a $450 billion economic relief plan for small business to add to the trillions already pledged to support the economy.
Big-name companies including IBM, Netflix and Coca-Cola are also due to deliver their earnings reports.
– Key figures around 1115 GMT –
West Texas Intermediate: DOWN 32 percent at $12.41 per barrel
Brent North Sea crude: DOWN 3.8 percent at $27.01 per barrel
London – FTSE 100: DOWN 0.6 percent at 5,750.30 points
Frankfurt – DAX 30: DOWN 0.4 percent at 10,588.95
Paris – CAC 40: DOWN 0.6 percent at 4,474.04
Milan – FTSE MIB: DOWN 0.7 percent at 16,947.98
Madrid – IBEX 35: DOWN 1.2 percent at 6,792.30
EURO STOXX 50: DOWN 0.4 percent at 2,877.81
Tokyo – Nikkei 225: DOWN 1.2 percent at 19,669.12 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 24,330.02 (close)
Shanghai – Composite: UP 0.5 percent at 2,852.55 (close)
New York – Dow: UP 3.0 percent at 24,242.49 (Friday close)
Euro/dollar: UP at $1.0876 from $1.0875 at 2100 GMT Friday
Dollar/yen: UP at 107.72 yen from 107.54
Pound/dollar: DOWN at $1.2454 from $1.2499
Euro/pound: UP at 87.31 pence from 87.01 pence
[AFP]
The Nigeria Liquefied Gas on Friday called for energy security to be made a national priority through proactive measure in a manner that the infrastructure and critical assets are protected for the sustainable growth of the oil and gas industry.
Speaking at a panel session titled “Driving Cross-Continental Investments: Scaling Africa’s Energy Frontier” at the 8th Nigeria International Energy Summit (NIES), the Managing Director/Chief Executive Officer of NLNG, Philip Mshelbila stated that there were growing concerns over gas infrastructure security, stressing that while improvements have been recorded in securing oil assets, that gas infrastructure remains vulnerable, and without adequate protection which will lead to underperformance in the industry.
Mshelbina stated that NLNG was focused on boosting both domestic and regional energy access, adding that the company was making smaller-scale investments to retain more gas for local consumption. He noted that a major step in this direction was NLNG’s decision to domesticate 100% of its Liquefied Petroleum Gas (LPG) supply for the Nigerian market.
Beyond the domestic market, Mshelbila remarked that the Company was also working towards enhancing regional energy security. He revealed that, as part of the Train 7 project, the company was constructing a third jetty to support small-scale vessels in supplying gas across Africa’s coastal markets.
Additionally, he said the company was supporting the Federal Government of Nigeria (FGN) in connecting Bonny Island to the mainland to facilitate LPG trucking, thereby strengthening domestic gas distribution. This initiative is expected to boost West Africa’s energy distribution network, positioning NLNG as a key player in the region’s energy landscape, he noted.
Mshelbila also emphasised the need for clear and consistent regulatory frameworks to attract long-term investments.
Through proactive methane reduction, low-carbon innovations, and impactful social initiatives, Mshelbila remarked that NLNG’s commitment to local content and sustainability aligned with global energy transition priorities, stating that NLNG was building investor confidence and demonstrating long-term value.
The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, NEITI, Dr. Orji Ogbonnaya Orji has said, the sum of $200 billion is needed to be injected into Nigeria’s gas infrastructure for its development and maximization of the natural resources as the ninth largest gas producer in the world as number one in Africa.
He pointed this out in the 2021 – 2023 reports on Oil, Gas and Solid Minerals presented to the Public Accounts Committee chaired by Senator Aliyu Wadada Ahmed, saying the required infrastructure for maximization of gas resources in the country are not there.
He said, there was need for the injection of $20 billion yearly into gas infrastructure for a period of ten years for construction of gas pipelines along and across West African sub-region, and beyond which is a huge expenditure”, he said.
Orji said: “In Nigeria, what we need, is to invest in gas infrastructure to evacuate gas as our study shows that we need an initial investment of $20 billion annually for 10 years to be able to generate the kind of gas infrastructure required to provide gas for the whole of Africa and beyond.
A member of Senate Committee on Public Accounts, Senator Abdul Ningi asked, “what NEITI is doing on alleged $8.5billion unremitted into the consolidated revenue fund by Nigerian National Petroleum Company Limited, Federal Inland Revenue Service and Nigerian Upstream Petroleum Regulatory Commission in 2023”, the NEITI boss said the Economic and Financial Crime Commission, EFCC , is already probing the agencies involved.
Senate panel were further irked by the submission in the NEITI’s report that less than 1% of solid minerals is remitted into Federal Government’s Consolidated Revenue Fund account.
Chairman of Senate Committee on Public Accounts, speaking on remittances of Solid Minerals into the Consolidated Revenue Fund decried the less than 1% contribution of proceeds from the sector on yearly basis.
Other members were unanimous that, NEITI’s report on solid minerals, is not reflective of what is going on in the solid mineral sector.
They wondered why only States like Ogun, Osun, Kogi, Edo, Ebonyi, Rivers, Cross Rivers and FCT, were mentioned in the report excluding Nasarawa , Zamfara , Kebbi , Plateau, Bauchi etc .
Specifically the Chairman of the Committee, Senator Wadada described the less than one 1% contribution of solid minerals to GDP as quite ridiculous and unacceptable.
“This definitely must not continue, there must be complete overhaul of the sector “, he said
Oil and Gas
Niger Tanker Explosion: NUPENG urges government to repair roads, senditise citizens on danger of fuel scooping
The national secretariat of the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, has urged the Federal Government to repair roads to avert tanker tragedies across the country.
NUPENG made the call in reaction to the recent tragic tanker explosion in Suleja, Niger State.
A statement jointly signed by Williams Akporeha and Olawale Afolabi, respectively, President and General Secretary stated that the union was “deeply saddened by the loss of lives, the destruction of properties, and the injuries sustained by many in this devastating incident.”
The statement, issued to newsmen in Abuja on Sunday, also appealed to the Federal Government to urgently address the poor condition of federal roads.
The statement read in part: “The Union takes this opportunity to urgently appeal to the Federal Government to repair bad roads to prevent such incidents and to intensify efforts in sensitising the public about the dangers of scooping fuel from petroleum truck accidents.
“Our thoughts and prayers are with the victims and their loved ones during this traumatic and challenging time.”
NUPENG further sppealed to the Federal Government to take urgent steps to repair federal roads which it noted were in bad shape.
It also tasked the Federal Government to mandate its relevant agencies to seize the initiative towards sensitising Nigerians on the danger of scooping fuel from scenes of petrol tanker accidents.
The statement further reads in part:”The Union takes this opportunity to urgently appeal to the Federal government to repazir bad roads to prevent such incidents and to intensify efforts in sensitizing the public about the dangers of scooping fuel from accidental situations of petroleum trucks on highways.
“As a responsible organization, NUPENG collaborates annually with relevant agencies, including the Federal Road Safety Corps, the Police, and State Traffic Management agencies, to train our drivers on road safety. The Union is committed to continuously training and retraining our members on best driving and safety practices.
“We stand in solidarity with the affected families and the entire Dikko community in Niger State. We commend the emergency responders who bravely extinguished the fire and rescued many injured victims.
“We urge all relevant authorities to provide the necessary support and medical care to those injured and to take measures to prevent future tragedies.
“May the souls of the departed rest in peace, and may their families find the strength to bear these irreparable losses.”
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