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Oil Market Defies US-led Coalition’s Strategy to Lower Rising Prices

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Despite the United States-led coalition’s strategy to cool oil prices, the market remained steady yesterday, with Brent, Nigeria’s benchmark oil, still above $80 per barrel.

Precisely, Brent crude futures gained seven cents to $82.32 a barrel yesterday, while the West Texas Intermediate (WTI) crude futures fell marginally by 12 cents, or 0.

2 per cent, to $78.
27 a barrel, still a far cry from the coalition’s expectations.

Investors are waiting for how major producers respond to the emergency oil release designed to tone down prices, with the Organisation of Petroleum Exporting Countries (OPEC), Russia and allies, called OPEC+, expected to meet on December 1st and 2nd to set policy.

But OPEC expects the United States’ release to swell a surplus in oil markets by 1.1 million barrels per day (bpd), a source from the group said, although for now the decision by the coalition has largely backfired.
The United States and other high oil-consuming nations, including China, Britain, India, Japan and South Korea, had on Tuesday made good their threat to counter a slower-than-expected release of oil barrels by OPEC in a coordinated bid to reduce rising crude prices.

OPEC+ producers have repeatedly ignored calls for more crude by the US President, Joe Biden, prompting the country to mobilise a handful of high oil consuming nations to release the commodity from their Strategic Petroleum Reserves (SPR).

Crude oil prices recently touched seven-year highs and although they are still some way short of levels reached between 2011 and 2014, when they broke through $100 a barrel, many consumers are feeling the pain of a dramatic increase from a year ago.

While the US announcement is for a release of 50 million barrels, the equivalent of about two and a half days of the country’s demand, India would release 5 million barrels, while Britain would allow the voluntary release of 1.5 million barrels of oil from privately held reserves, according to the agreement.

OPEC has been struggling to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day (bpd) each month – a pace Washington sees as too slow.

Nigeria, an OPEC member has said that even if prices fall to between $50 to $60, it won’t be much of an issue, with the country’s oil benchmark for the 2021 budget being $40.
The cartel’s situation has been further worsened by the inability of mostly African countries led by Nigeria to meet their allocation, due largely to waning investment, ageing upstream infrastructure and disruptions by some local host communities.

Three sources told Reuters yesterday that OPEC+ was not discussing pausing its oil output increases, despite the decision by the United States, Japan, India and others to release emergency oil stocks.
OPEC members the United Arab Emirates and Kuwait said they were fully committed to the OPEC+ agreement and had no prior stance ahead of next week’s meeting. Nigeria, a strong member of the organisation has always aligned with the decision of the majority.

Iraq, also an OPEC member, said it backs continuing OPEC+’s existing plan of raising output by 400,000 bpd a month, saying the outlook for the oil market was unclear due to turbulence in global markets.
High oil prices have added to inflationary concerns, with the coordinated release expected to add around 70-80 million barrels of crude supply to markets, according to analysts at Goldman Sachs.
The US Department of Energy had launched an auction to sell 32 million barrels of strategic petroleum reserves(SPR) for delivery between late December to April 2022. It plans to release another 18 million barrels soon.

Some OPEC delegates warned this week that releasing strategic reserves may lead to the alliance holding back crude supply in January, a development that will further starve the market of its much needed supply.
In addition, the International Energy Agency (IEA) has accused Saudi Arabia, Russia and other major energy producers of creating “artificial tightness” in global oil and gas markets, urging OPEC+ to accelerate the return of supplies.

Predictions on the response are mixed. Citigroup Inc. said OPEC+ is likely to stick to its planned increase of 400,000 barrels a day for January because reducing supply would erode the group’s claim of providing public good by stabilising oil markets, while others feel the alliance will suspend the hike to provide a buffer to demand headwinds.

However, the OPEC advisory body has predicted that the excess in markets would expand by 1.1 million barrels a day in January and February to 2.3 million and 3.7 million a day, respectively. That is, if 66 million barrels are injected by major consumers over the two-month period, according to a document leaked to the public.

If Nigeria keeps to its assurances to ramp up production by the end of this year, according to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), the country would be producing as much as 1.8 million bpd by December ending.ThisDay

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Economy

We Currently have $30bn Investment Commitments – FG

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The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, says Nigeria currently has about 30 billion dollars investment committment from various investors.

Uzoka-Anite said this at the ongoing Ministerial Media briefing in Abuja on Friday.

According to her, the commitments will be redeemed over the course of five to eight years.

She said investments, commitments, and pledges were also received from our oil and gas free zone, adding that last week, some of them committed an additional 10 billion dollars in investments.

“I hosted the managing director of SHELL who explained to me about the investment plans of shell.

“ I know a lot of us are aware that shell is leaving; he came to explain to me what they mean by that.

And I can tell you that they are not leaving.

“Rather, they are expanding and increasing their investments in Nigeria; they are selling their onshore assets and increasing their investment in gas and offshore assets.” she said.

Uzoka-Anite, who envisaged more investments into the country, said  it would not have been possible without the commitment of President Bola Tinubu led administration.

She said that with increased investments comes job opportunities and economic growth, which wss part of the priority of the government. (NAN)

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Economy

Nigerian Breweries Records N106bn Loss in 2023

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Nigerian Breweries Plc has recorded a net loss of N106 billion for the year ended 2023, as against N13.93 billion posted in its 2022 financials, indicating 860 per cent loss.

Mr Uaboi Agbebaku, Company Secretary, Nigerian Breweries stated this in the audited financial result of the company for the year ended 2023 sent to the Nigerian Exchange Ltd.

(NGX)

Agbebaku said the gross profit of the company for the year under review also fell by 0.

3 percent to N212.5 billion, compared to N213.20 billion posted in the previous year.

He stated that the operating profit of the company declined by 15.

3 per cent to 45 billion, as against N53 billion recorded in the corresponding year.

The company secretary said that the firm recorded loss in its operating profit due to higher input cost and one-off reorganisation cost despite strong and aggressive cost savings and other efficiency measures.

According to him, the company however was able to grow its revenue by nine per cent to N599 billion, compared to N551 billion posted in the previous year, which was aided by positive price mix.

Agbebaku stated that the Nigeria business landscape experienced significant shifts in 2023, with substantial impact on businesses and livelihoods nationwide.

He explained that the Naira notes redesign which resulted in cash shortage that severely hampered social and economic activities nationwide set the tone for a turbulent year.

Agbebaku said: “High double-digit inflation rates with food inflation at more than 30 per cent and removal of subsidy on fuel.

“Coupled with the impact of the devaluation of the naira which resulted in a foreign exchange loss of N153 billion further exacerbated the already difficult environment for the populace and businesses.

“In a difficult operating environment, the Board will ensure that the company builds on its more than 77 years’ experience of operating in Nigeria to cope with current realities.

He said the company would continue to be resilient and forward-thinking, leveraging on its broad portfolio, strong supply chain footprint and passionate workforce to drive long-term value creation for its shareholders and other stakeholders.(NAN)

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Economy

NDLEA Tincan Command Intercepted 876.453kg Illicit Drugs, others in 2023-Commander

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 The National Drug Law Enforcement Agency (NDLEA) Tincan Special Area Command,  says 876.453 kilograms of various illicit drugs and controlled substances were intercepted in 2023.

Commander Mohammed Abubakar of the command said this in a statement in Lagos on Thursday.

He listed the drugs as cocaine worth 24kg; Canabis – 852.

45KG; and Tramadol – 0.
003KG, all totalling 876.
453KG.

According to Abubakar, a total of 15 individuals were arrested and prosecuted during the period, out of which 10  were convicted.

He added that the feat was achieved through relentless efforts and meticulous investigation, which led to the dismantling of several drug trafficking networks and the subsequent prosecution of individuals involved.

“The Tincan special area command has been at the forefront of strategic operations in the area, targeting illicit drug smuggling activities and apprehending those responsible.

“In recent months, the efforts have culminated in multiple successful seizures and arrests, emphasising the agency’s commitment to eradicating drug-related crimes within our society.

“In one operation carried out at the Tincan port, a notable seizure of illicit drugs (Cannabis Indica also called Colorado) totalling 161.5kg was made, along with sum of 22,900 dollars offered as bribe to officers.

“The intercepted drugs, were concealed within cargo shipments of used vehicles from Montreal Canada, indicating the ingenuity of the involved drug traffickers,” he said.

Abubakar said that several investigations were conducted in collaboration with national and international law enforcement agencies, leading to the identification and apprehension of some of the key players in these drug networks.

The NDLEA boss noted that the combined efforts proved fruitful, resulting in the arrest of some of the persons directly involved in the importation, distribution, and sales of illicit drugs.

He said that throughout 2023, the command embarked on various sensitisation and enlightenment activities within and around the Tincan island port.

He listed them to include advocacy visit to all stakeholders in and around the port, public enlightenment and lectures, rallies and engagement of traditional rulers and non-governmental organisations around the port environment.

“All the activities were carried out under aegis of ‘War Against Drug Abuse’ (WADA) and  was designed to reduce demand and abuse of illicit drugs and psychotropic substances in Nigeria.

The NDLEA Tincan special area commander appreciated stakeholders in the maritime industry, and other relevant government agencies for their unwavering support and collaborative effort in these operations.

He added that their dedication and joint action had played a crucial role in the successes achieved thus far.

He also urged all licensed Customs clearing agents to stop the practice of authorising third party individuals to clear cargo under their company stamp.

He pointed out that the practice, automatically made the company liable to any cargo cleared,  using its name and stamp.

“This may become a real problem when illicit drugs are discovered and the company cannot provide any tangible information or whereabout of the owners of the cargo.

“Clearing agents have the responsibilities to not only adhere to laws but to cooperate with law enforcement agents undertaking an investigation.

“The NDLEA Tincan special area command sends a strong message to all those involved in drug trafficking and other illicit activities, we intend to use every available resource to bring them to justice and put an end to their illegal operations,” he said.

He said the command would continue to enhance their intelligence capabilities, invest in modern equipment, and provide training for its officers to combat drug trafficking effectively.

“The agency urges the public to remain vigilant and report any suspicious activities related to drug trafficking to the NDLEA or relevant law enforcement agencies. Together, we can create a safer and drug-free environment for all Nigerians,” he said. (NAN)

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