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Crude Oil Prices Stabilise At $97.88pb

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The international crude oil

prices stabilised Friday, following a recent jump. The escalating turmoil in Libya still left major indexes down about 2 per cent last week.

Oil prices settled at $97.88, down from a high of $103 Thursday but still up 13 per cent over the last week.

Oil prices have been rising, sending stocks lower, as concerns rose that violence would spread throughout North Africa and the Middle East, affecting oil production for big OPEC producers like Iran and Saudi Arabia.

Those concerns eased late Thursday after the International Energy Agency said the impact was far less than analysts had estimated and that any shortfall could be easily made up by tapping oil reserves in other countries.

Boeing Co. rose 2.2 percent after the Air Force awarded the company a $35 billion contract Thursday, one of the largest ever made by the military, for nearly 200 airborne refueling tankers.

DreamWorks Animation SKG Inc. fell 2.8 percent after the entertainment company reported revenue and earnings that were far below what analysts were expecting. Poor box office results from the Will Ferrell movie “Megamind” were partly to blame.

The Dow Jones industrial average rose 61.95, or 0.5 percent, to close at 12,130.45. It was the first rise for the Dow after three days of losses.

The Standard & Poor’s 500 index rose 13.78, or 1.1 per cent, to 1,319.88. The Nasdaq composite rose 43.15, or 1.6 per cent, to 2,781.05

All three indexes are still down for the week, largely a result of the fighting in Libya.

Libya is Africa’s largest producer of oil but only ranks 15th among the world’s oil exporters. Traders have been concerned that fighting could not only threaten Libya’s oil production but also spread to other countries in the region such as Saudi Arabia.

Higher oil prices also weigh on the United States economy by increasing the costs of moving goods and filling up gas tanks. A sustained $10 increase in the price of oil translates into a 0.2 per cent cut in economic growth over 12 months, according to a recent estimate by economists at Goldman Sachs.

Treasury inched up Friday on reports the economy grew more slowly than first thought in the last three months of 2010. The yield on the 10-year Treasury note edged down to 3.42 per cent from 3.46 per cent late Thursday.

The Commerce Department said the economy expanded at an annual rate of 2.8 per cent in the October-December quarter. That’s weaker than the previous estimate of 3.2 per cent.

In an attempt to close budget gaps, state and local governments have cut spending much more deeply than previously thought.

Despite this week’s slide, the S&P 500 is up 2.6 per cent in February and 4.9 per cent for the year. Stronger earnings from a wide range of companies, including Archer Daniels Midland Co. and Dell Inc., have helped drive stocks higher.

Five stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume was 3.9 billion shares.

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Oil & Energy

Buhari Thumbs Up For NLNG As NNPC Reviews Activities

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The Nigerian National Petroleum Corporation (NNPC) held its head high as it commenced activities for the week following commendation from President Muhammadu Buhari for rallying shareholders to make Nigeria Liquefied Natural Gas Limited (NLNG) a company to reckon with.
Buhari who is also the Minister of Petroleum Resources gave the commendation at the ground breaking of the NLNG Train 7, recently.
He said that the NLNG had always been associated with success and had become a global company.
“The NLNG Train 7 represents another historic milestone in the history of NLNG. NLNG story has been associated with success,” he said.
The president also said that the NLNG had contributed 114billion dollars in taxes to Nigeria, and tthat with NLNG Train 7, there would be more jobs that would touch the lives of everyone particularly the host community.
He expressed joy how the NLNG had transformed from just a project to a very successful company in about 30 years.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, urged all shareholders to work hard to ensure the successful completion of the project which he said would boost government’s efforts to make Nigeria a fully industrialised nation.
Sylva also said the project would help the nation’s gas development aspiration.
NNPC’s Group Managing Director, Mallam Mele Kyari, that there was consensus among shareholders and board members to take the next step towards providing additional capacity which should be greater than what was on ground.
The NNPC GMD thanked President Muhammadu Buhari for his quick intervention which ensured the eradication of all pre-existing stumbling blocks on the path of NLNG Train 7 project
Also in the week under review, Minister of State for Petroleum, Sylva commended President Buhari at a ceremony to mark the execution of Shareholders Agreement between the NNPC, the Nigerian Content Development & Monitoring Board (NCDMB) and Zed Energy.

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Oil & Energy

Total Nigeria Advocates Petroleum Subsidy Removal

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Managing Director Total Nigeria, Plc, Mr Imrane Barry, says removal of petrol subsidy will help government to redirect its earnings to support infrastructure development for economic growth and development.
Barry made this known when he featured on a roundtable on Downstream and midstream at the Nigeria International Petroleum Summit (NIPS) in Abuja.
He spoke on the topic “The down/midstreams: Paths to the future through holistic and integrated solution”.
He said that signing of the Petroleum Industry Bill would help to unbundle the oil and gas industry and encourage development, private investment and create jobs.
“The petrol subsidy regime costs the country approximately 2.6 billion dollars (N1 trillion) per year and the country can no longer afford it.
“The removal of the subsidy will allow government direct more of its earnings towards infrastructure and social development,” he said.
He said that since government had declared decade of gas, there was need for Investment in Natural Gas.
He added that government needed to continue to push policies that would favour private participation and investment in the gas value chain, production, storage and distribution.
“Also, government needs to give incentives for investors in the sector, tax rebates etc to encourage long term participation.
“In the B2C sector, the government should put in  place incentives for customers to switch from white fuels to gas powered machines for road transportation.
“They should continue investment in the nation’s critical infrastructure that aids trade and commerce,’’ he added.
He further called for the fixing of Apapa ports and other ports in Nigeria, development of interstate road network, fixing of rail lines for human and cargo transportation
Commenting on impact of COVID-19 pandemic to global oil market, he said that it made the market volume shrank by 30% while margins became weak(Losses) with aviation sector mostly affected for the following reasons.
He added that the global economy was badly affected generally due to airport closure, drop in international prices of jet fuel platts which , led to a huge loss in aviation business due to contractual agreement with international airlines coupled with large amount of “old stock” in tank.
“PMS is a regulated product, with the price fixed by the government; resulting in fixed margins.
“The devaluation of the Naira from N360 to N380 during the pandemic, coupled with rising inflation in the country further eroded this “fixed margin” for the players in the downstream sector,” he said
He urged government to ensure speedy passage of the PIB to help the sector play its part effectively.

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Partners Execute Shareholder Agreement For Brass Products Terminal

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The Nigerian National Petroleum Corporation, (NNPC), along with their partner, the Nigerian Content Development & Monitoring Board, NCDMB, and Zed Energy have executed a shareholders’ agreement for the establishment of a 50 million litre Petroleum Products Terminal in Brass, Bayelsa State.
The N10.5 billion Brass Petroleum Products Terminal project is expected to deliver an automated 50 million litre depot with two-way product jetty, automated loading bay, and 6 automated tanks for storage of 30 million litres of Premium Motor Spirit (PMS)and 20 million litres of Automotive Gas Oil (AGO) and Dual Purpose Kerosene (DPK).
While speaking at the signing ceremony, the Minister of State for Petroleum Resources, Chief Timipre Sylva commended President Muhammadu Buhari for his giant strides in the Niger Delta which is making a huge impact on the people of the area.
“I make bold to say today without any fear of contradiction that no President has impacted the people of the Niger Delta like President Muhammadu Buhari. Aside from what we are witnessing today, remember there is also the Brass Fertilizer & Petrochemical Company, the Oloibiri Oil and Gas Museum and the Oil & Gas Park in Ogbia, all under Mr. President,” the Minister stated.
Sylva added that the establishment of the Terminal further demonstrates Mr. President’s commitment to the enhancement of the livelihood of the Niger Delta people particularly, the riverine communities in Bayelsa State where people purchase products at exorbitant prices due to logistics challenges associated with transporting products to that area.
Speaking shortly after signing the agreement, the Group Managing Director of the NNPC, Mallam Mele Kyari said the Corporation was proud to be part of the project which aside ensuring products availability in all nooks and crannies of the Niger Delta, will also guarantee the nation’s energy security and generate employment.
“This Terminal will create 1,000 direct jobs during the construction phase, and over 5,000 indirect jobs during its operation. Considering the potential for employment when completed, this will definitely reduce youth restiveness in the Niger Delta area and will also address the problem of illegal refining in the area,” Kyari stated.
In his remarks, the Executive Secretary of NCDMB, Simbi Wabote stated that this milestone was as a result of strong interagency collaboration and public-private sector partnership.
“The NCDMB will continue to drive such partnerships across the industry to bring development in Nigeria,” he noted.
Earlier, the Coordinator of the Project and Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr. Bala Wunti stated that the project would enhance the economics of marine petroleum products distribution.

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