Oil & Energy
Oil Futures Gain Despite US Demand Concerns
Despite a late decline, oil futures ended the week with gains.
Crude oil prices were on the rise at the start of the week, driven by concerns over the ongoing strike in France that had caused massive fuel supply disruptions as well as expectations of further quantitative easing (QE) from the United States’ Federal Reserve.
An update on US industrial production released last week showed a decline of 0. per cent in September, which was interpreted as another sign that more QE is inevitable.
However, traders were mindful of Fed Chairman, Ben Bernanke’s recent comments that suggested that while the Fed was inclined to resort to more stimulus to drive up inflation and spur the slowing recovery, it appeared to be undecided on what the timing and the scale of the next round of QE should be.
The US government’s lack of a resolution to introduce more QE has provided a relief for the US dollar that hit multi-month lows against a basket of other major currencies last week.
The surge in greenback has pushed down oil prices, making the dollar denominated crude more expensive for holders of other currencies, denting demand.
Oil was hit hard by China’s unexpected decision to hike interest rates by 0.25 per cent, which was announced on Wednesday, marking the government’s latest attempt to curb inflation that is firmly on track to eclipse the 3 per cent target for the full year.
Higher interest rates are expected to curb economic activity, pushing down the demand for crude oil from the world’s second largest energy consumer.
On top of that, the prices have been pressured by last week’s US inventories reports, which signalled a lower level of demand from the world’s largest energy consumer.
The US Energy Department said that gasoline stockpiles unexpectedly gained 1.3 million barrels last week, while crude oil inventories in the added 700,000 barrels.
Volumes were very low on Friday as investors opted to stay on the sidelines amid caution over the G20 meeting that kicked off in South Korea.
The group focused on fiscal policy issues, looking to work out an agreement to preclude a currency war that could cause countries to resort to protectionist measures.
CNOOC, GNPC Stake $5bn For Kosmos’ Assets
OIL & GAS; 9
China’s National Oil Corporation (CNOOC) and Ghana National Petroleum Corp. (GNPC) have submitted a $5 billion bid for Kosmos Energy LLC’s assets in the West African country.
Sources with direct knowledge of the matter said on Friday that buyers have been circling Kosmos, attracted to the company’s stake in a large oil discovery known as the Jubilee field.
Kosmos is backed by private equity firms Blackstone Group and Warburg Pincus.
The Tide gathered that Exxon Mobile had previously offered $4 billion for the stake.
Oil & Energy
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Oil & Energy
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By Felicity Bradstock for Oilprice.com 16
Oil & Energy
Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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