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Oil Prices Slide As US Dollar Strengthens

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World oil prices plunged on Friday as traders took their cue from the strengthening United States dollar and eyed a crucial update on energy stockpiles in the United States, analysts said.

  New York’s main futures contract, light sweet crude for delivery in March, fell 1.64 dollars to 73.64 dollars a barrel.

  Brent North Sea crude for March delivery plunged 1.48 dollars to 72.64 dollars a barrel.

  Oil sank after the European single currency fell close to a nine-month dollar low, as markets took a dim view of eurozone growth data and unclear EU proposals to help debt-ridden Greece.

  In late morning London trade, the euro tumbled to 1.3532 dollars, the lowest level since last May 19. That compared with 1.3695 in New York late on Thursday.

  A stronger dollar usually dampens demand for oil because it makes dollar-priced crude more expensive for buyers using weaker currencies.

  EU leaders stopped short Thursday of offering a bailout to rescue eurozone member Greece. Deep problems in Greek public finances have highlighted the parlous debt of other crisis-hit countries such as Italy and Spain.

  Investors also sought the safe-haven dollar after China ordered financial institutions to increase the amount of money they keep in reserve, as Beijing looked to rein in rampant lending amid fears of asset bubbles.

  The development was an additional concern for the oil market because China is the world’s second biggest energy consuming nation after the United States.

  Later Friday, traders will digest a key US inventories report for the week ending February 5. The report, usually published on Wednesdays, was delayed due to a snowstorm in the northeastern US.

  This week, crude futures have edged higher as investors mulled the prospect of EU financial support for crisis-hit Greece — and as the US east coast experienced its second huge snowstorm in less than a week.

  The International Energy Agency forecast on Thursday that world oil demand and prices would rise this year, driven higher by strong growth in emerging economies, revising upward its earlier forecasts.

  The Paris-based agency said demand was now expected to be 86.5 million barrels per day in 2010 compared to a forecast last month of 86.3, while average prices will rise to 75 dollars per barrel from 58 in 2009.

  Global daily demand is now estimated at 84.9 million barrels per day (mbd) in 2009, and thus the IEA is predicting a 1.6-mbd increase.

  Demand growth is expected to come “entirely” from outside the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 developed economies including Britain, France, Germany, Japan and the United States.

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Prosecute Culprits In N14bn Hidden PHCN Fund, Stakeholders Call

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Stakeholders have called for the prosecution of culprits fingered in the N14 billion hidden fund of defunct Power Holding Company of Nigeria (PHCN) in banks.
Human rights activist and president, One Nigeria Empowerment Initiative Inc (ONEII), Comrade Onwumere, while speaking with newsmen,  urged Federal Government to prosecute the people responsible for keeping such amount in banks at the detriment of improving the sector.
Onwumere noted that proper investment of such money could go a long way to bring the expected turnaround in the industry.
He described the act as criminal against the improvement of the energy sector in the country.
According to him, proper and regular supply of electricity would help reduce crime rates because many who were pushed into criminal activities following their inability to find useful means to earn decent living would channel their strengths into good lucrative jobs or businesses.
Similarly, Comrade Najeem Abubakar described the people who hide such money as anti-progress.
“Hiding any money meant for development of public facilities is wrong, as such they should be dealt with because they are enemies of the state.
“Nigeria is never a lawless country. The officers that hid such billions of Naira in the bank are criminals, they should be prosecuted and brought to book because it is and infringement on the people’s right by stealing their tax money, money which ought to be used for the general public.
“Availability of electricity at regular bases will help to create more jobs for the people. All those who are forced to take part in crimes or go into okada riding because of idleness can take into barbing saloon, tailoring or other means of making money when there will be improved electricity,” he stated.
In the same vein, he advised government to utilise the money to  improve electricity supply to the country and provide more prepaid meters for consumers.
He also called on EFCC to investigate the corrupt act in order to fish out those behind the act to serve as a deterrent.

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US Plans To Reduce Gasoline Prices

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The Biden Administration is considering tapping the Strategic Petroleum Reserve as a potential tool to bring down the gasoline prices
Selling millions of barrels from the SPR may do precious little to impact the price of gasoline directly
·If the Administration were to opt for an SPR sale to increase the availability of crude, it could likely release up to 60 million barrels of crude oil
·The Biden Administration is considering tapping the Strategic Petroleum Reserve as a potential tool to bring down the gasoline prices in America that have hit a seven-year high this year.
However, selling millions of barrels from the SPR may do precious little to impact the price of gasoline directly, traders and analysts say.
A sale from the SPR could be one of “tools in the arsenal”—as U.S. President Joe Biden said this weekend – which the Administration could use to relieve the burden on households who have been paying in recent months the highest prices at the pump since 2014.
Yet, the U.S. may be able to release up to a tenth of the current stockpile in the SPR, traders have told Bloomberg. That wouldn’t be enough to bring down gasoline prices as much as the Administration possibly hopes, they warn.
Moreover, most of a potential sale could consist of sour crude grades, which currently are not the favorite of refiners because they need more natural gas—whose prices are much higher now—to process those sour grades into fuels.
SPR Release On The Table After OPEC+ Snub
“The SPR is certainly on the table as an option. The president will have more to say about that,” U.S. Energy Secretary Jennifer Granholm said on Friday when asked what America can do now to reduce gasoline prices.
President Biden is considering a release from the SPR as a possible move to reduce gasoline prices in the United States, after OPEC+ ignored on Thursday calls for putting extra barrels on the market, Secretary Granholm told Bloomberg last Friday.
The President could announce measures to address high gasoline prices as soon as this week, Granholm told MSNBC in an interview on Monday.
“Hopefully there will be an announcement or so this week,” Granholm told MSNBC, referring to the President’s possible moves.
“He’s certainly looking at what options he has in the limited range of tools a president might have to address the cost of gasoline at the pump, because it is a global market,” the energy secretary added.
Gasoline Prices Highest Since September 2014
Meanwhile, U.S. gasoline prices continued to climb despite the end of driving season two months ago.
In the week to November 8, “The price at the pump continued its slow climb, rising two cents on the week, with the national average for a gallon of gas hitting $3.42,” AAA said on Monday. That’s the highest since September 2014.
“The latest decision by OPEC and its oil-producing allies to maintain their planned gradual increase in output will not help lessen supply constraints, so any relief will most likely have to come from the demand side,” according to AAA.
Shorter days with the end of the daylight saving time could decrease demand for gasoline in coming weeks, AAA spokesperson Andrew Gross said.
SPR Sale Will Likely Be Up To Three Days Of U.S. Petroleum Consumption
If the Administration were to opt for an SPR sale to increase the availability of crude, it could likely release up to 60 million barrels of crude oil, after accounting for mandatory sales pre-approved by Congress and the minimum volumes needed at the storage sites, a source at one of the world’s top oil trading houses told Bloomberg on condition of anonymity.
As of November 5, the SPR held 609.4 million barrels of crude oil, of which 252.5 million sweet crude and 356.9 million sour crude.
A release of up to 60 million barrels in theory would cover around three days worth of total U.S. petroleum consumption, which was 20.5 million barrels per day (bpd) in the pre-pandemic 2019, per EIA data.
According to analysts, an SPR sale wouldn’t do much to reduce prices at the pump and relieve the burden on households amid inflationary pressure for all other goods.
“Other Tools In The Arsenal”
President Biden hinted during the weekend of “other tools in the arsenal” to tame rallying gasoline prices.
“There are other tools in the arsenal that we have to deal — and I’m dealing with other countries; at an appropriate time, I will talk about it — that we can get more energy in the — in the pipeline, figuratively and literally speaking,” President Biden said, referring to the oil market after OPEC+ snubbed the U.S. Administration’s call for extra supply.
On Monday, eleven Democratic Senators wrote a letter to President Biden “to express our support for your efforts to help families and businesses across the nation who are struggling to cope with soaring gasoline prices.”
“Continued U.S. exports and overseas supply collusion could be devastating to many in our states, contributing to higher bills for American families and businesses,” the Senators, including Elizabeth Warren, said.
“In light of these pressing concerns, we ask that you consider all tools available at your disposal to lower U.S. gasoline prices. This includes a release from the Strategic Petroleum Reserve and a ban on crude oil exports. We hope you will consider these tools and others to make gasoline more affordable for all Americans,” the Senators wrote.
Faced with the highest gasoline prices in seven years and one of the worst fears of every American president—high prices at the pump, the U.S. Administration with the long-term clean energy agenda is now scrambling to provide immediate relief to people’s gasoline and energy bills.

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FG Increases Prices Of Electricity Meters

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The Federal Government has raised the cost of both single-phase and three-phase electricity meters.
In a circular dated November 11, 2021, issued by the Nigerian Electricity Regulatory Commission, NERC, price of a single-phase meter has been increased from the current cost of N44,896.17 to a revised price of N58,661.69.
It also increased the price of a three-phase meter from the current cost of N82,855.19 to a revised rate of N109,684.36.
The memo with reference number NERC/REG/MAP/GEN/751/2, entitled ‘Review of the unit price of end-use meters under the Meter Asset Provider and National Mass Metering Regulations’; managing directors, all electricity distribution companies and all meter asset providers are to effect the increment from November 15, 2021.

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