Connect with us

Business

Oil Prices Rise On Likelihood Of OPEC Supply Cuts



Oil prices rose on Monday after Saudi Arabia said producer club OPEC and Russia were likely to keep withholding supplies, and in relief that the United States and Mexico averted a trade war that would have damaged the global economy.

Front-month Brent crude futures, the international benchmark for oil prices, were at $63.71 at 0017 GMT, 42 cents, or 0.7%, above Friday’s close. U.S. West Texas Intermediate (WTI) crude futures were at $54.43 per barrel, 44 cents, or 0.8%, above their last settlement.

Traders said crude prices were rising because of statements by OPEC’s de-facto leader Saudi Arabia on Friday saying that the group was close to agreeing on extended supply cuts.

“With a production cut extension now sounding more likely than not, it should be incredibly supportive for oil prices,” said Stephen Innes, Managing Partner at Vanguard Markets.

The Organization of the Petroleum Exporting Countries (OPEC) and some non-members, including Russia, known collectively as OPEC+, have withheld supplies since the start of the year to prop up prices.

“Also with the Mexican stalemate averted and no harmful shockwaves from this weekend G-20 meeting, risk assets should open with a bounce in their step and oil could trade favorably as WTI and Brent will continue to track the broader risk environment high,” Innes said.

Stock markets jumped on Monday after a deal between the United States and Mexico to combat illegal migration from Central America late last week averted a tariff war between the neighbors.

Facebook Comments
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Otedola confirms sale of Forte Oil

Billionaire businessman, Femi Otedola, has announced the sale of Forte Oil Plc.

Otedola, who was chairman of the oil firm, had announced plans to sell off his 75 per cent stake in the company to “maximise the opportunities in refining”.

In a message he posted on Instagram on Wednesday, he confirmed that the process is now complete.

According to Otedola, he is now prepared to focus on his investment in the power sector.

“A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders.

“In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc. We wish our successors the very best and urge them to build on our legacies which have been established since 1964,” he wrote.

Facebook Comments
Continue Reading

Business

Topmost Rating Agency, Moody’s, Says Nigeria Banking Outlook Stable



Moody’s is keeping its outlook on the Nigerian banking system stable to reflect its resilient capital buffers and stable deposit bases, with high risks likely to subside as the economy is expected to strengthen.

The rating agency stated this in its new report on the African country’s financial institutions.

“Nigerian banks’ asset risk and profitability will remain key rating challenges, but we expect these challenges to gradually decline in 2020 as the economy picks up,” said Peter Mushangwe, Analyst at Moody’s.

“Banks’ funding and liquidity profiles will remain stable thanks to solid deposit bases.”

The key highlights of its report include the fact that non-performing loans (NPLs) will decline to 7% – 8% over the outlook period from 11.7% at year-end 2018 – but still at a high level; and that system-wide tangible common equity will be stable at 16% of risk-weighted assets at year-end 2018, thereby sufficient to bear losses.

The report also pointed out that “banks revenue will be restrained by subdued loan growth while cost pressures, due to IT investments, an AMCON levy2 and higher staff costs, will slow pre-provision profitability.

“Loan quality pressures will ease but remain banks’ main weakness. Nonperforming loans (NPLs) will decline to 7%-8% in the next 12-18 months from 11.7% at the end of 2018 – still a high level. Higher oil prices will constrain new NPL formation while high loan-loss reserves will allow banks to write off some of their bad debts. These credit positives will be moderated by lingering risks from high loan concentrations and high delinquency levels.

“Moody’s expects Nigeria’s real GDP to expand 2.3% in 2019 and 2.8% in 2020, up from 1.9% last year, but well below the level required to improve living standards. Lending growth will recover in the second half of the year following a contraction in 2018, but it will remain subdued and will not appreciably boost banking revenue,” Moody’s Investors Service said in a report published on Tuesday.

Facebook Comments
Continue Reading

Business

Petrol Sells At Average Of N145 Across Nigeria -NBS



Nigerians bought a litre of Premium Motor Spirit (PMS) or petrol, at the exact government regulated price of N145.0 nationwide data released Monday by the Nigerian Bureau of Statistics shows.

According to the statistical authority in the country, Ebonyi State was the most expensive place to fuel your car in Nigeria with a liter of gasoline going for N146.25.

The data Bureau said the average price for diesel around the country was N228.02 in May, while a liter of kerosene was sold for N315.91, a gallon was bought at the cost of N1,210.56.

In the same period, a 5kg refill liquefied Petrol Gas (LPG cylinder cost N2,028.04 while a 12.5kg cooking gas was sold for N4,220.44. Generally, all the data sets released by the NBS shows a decrease in the prices of the commodities measured.

For petrol, there was a 3.4 percent decrease in the price of the product year-on-year. There was also a 0.6% decrease from N145.9 in April to N145.0 in May 2019. Kwara- N146.14 and Niger- N146.11, were the second and third most expensive places to buy petrol.

The cheapest places to operate a car-guzzling engine are Enugu- N143.55, Katsina- N142.50 and Gombe N141.08. There was also a decrease in the price of diesel nationwide between April and May.

In April, a liter of diesel was sold for N230.67 which is 1.15% more than the price of N228.02 for May 2019.

However, there was a 10.87 percent increase when the price in May 2018 is compared with the corresponding month in 2019.

The most expensive places to operate a high diesel consuming generator or bus, in May, were the Boko Haram ravaged states of Borno- N266.67, Adamawa- N245.63 as well as Cross River- N245.28.

The cheapest states to fire your industrial generators and commuter-sized buses in May were, Nasarawa- N206.91, Ekiti- 206.65 and the epicenter of herder/farmer clashes, Benue- N203.33. There was an increase in the price of a gallon of kerosene year-on-year, just as there was in the price of diesel.

Between May 2018 and May 2019, there was a 23.07 percent surge in the price of a gallon of kerosene.

In April however, the price of the cooking fuel was N1211.99 in April- making a 0.12 percent decrease to N1,210.56 in the month under view. Gombe- N1,415.38, Taraba, N1,397.00 and Jigawa- N1,378.57, are the most expensive states where you can re-fill your gallon of kerosene. The product was cheapest in Bayelsa- N1,040.90, Akwa Ibom- N1,031.25 and Abuja- N1,012.50. The price of a 12.5kg LPG decreased in both month-on-month and year-on-year comparisons- a similarity it shares with PMS. There was a 0.79 percent drop from 4,253.91 in April to N4,220.44 in May.

When May 2019 is juxtaposed with the preceding May, there is a 1.82 percent in the price of a 12.5kg cooking gas. The states where it was most expensive to cook with a 12.5kg gas cylinder in Nigeria were, the hydrocarbon producing states of Bayelsa- N4,690.00, Akwa Ibom- (N4,611.67) as well as Enugu (N4,608.33).

The cheapest places to cook meals that require much heat in may with a 12.5kg cylinder were Katsina- N3,842.86, Kano- N3,825.00 and Ekiti- N3,806.25. The price of a 5kg cooking gas reduced by 0.90 percent month-on=month and 2.13 percent year-on-year.

While the federal government keeps the price of petrol at N145 through subsidies it intends to put in the budget for the first time since the 2015 appropriation document, Nigerians pay for that prince to be uniform across the country.

Through payment mechanisms such as the Marine Transport average, the National Transport Allowance/average, Bridging fund and interdistrict scheme which are embedded into the cost of a liter of petrol, Nigerians ensure that their kin in far-flung parts of the country get the product at the same cost as those near functioning ports and depots.

Since the price of the product is arbitrarily fixed at N145, the federal government invariably subsidizes the actual price of PMS which is above N145 while factoring in the equalization cost as well.

Facebook Comments
Continue Reading
Advertisement
Advertisement

Trending

%d bloggers like this: