Crude oil prices rallied to $70.43 last week Friday, ending the week bullish for the first time since November 2018. This means Brent closed last week 2.9% higher. Meanwhile, oil prices maintained its bullish run yesterday, as it closed at $70.76 a barrel.
Brent oil prices rose, as expectations of tight global supply outweighed pressure from rising U.S. production and less robust global demand indicators.
Similarly, U.S. West Texas Intermediate (WTI) crude settled 98 cents higher at $63.11 a barrel on Friday, rising 1.6% to a new five-month closing high. WTI posted its fifth consecutive weekly gain, rising 4.9% over 5 days.
Both contracts hit new five-month highs
Oil prices are rallying in reaction to the U.S. employment report. According to John Kilduff, a partner at Again Capital LLC in New York:
“Signs of global economic slowdown had been a headwind for oil prices, but this morning’s report seemed to dispel at least some of those concerns.”
Meanwhile, Crude futures received a boost from news of a potential slowdown in crude production out of Venezuela, as U.S. sanctions and energy blackouts hit the OPEC nation’s oil industry.
Over-delivering Saudi Arabia is OPEC’s Bull
The combined production of all 14 OPEC members reportedly stood at 30.4 million bpd last month, down by 280,000 bpd compared to February and the lowest level of OPEC production since February 2015.
However, Saudi Arabia’s production cut has pushed down OPEC’s crude oil production by 570,000 bpd from February to 30.23 million bpd in March. According to the monthly report of S&P Global Platts survey, OPEC’s current production represents the lowest production in more than four years.
OPEC’s de facto leader and biggest producer, Saudi Arabia, reportedly cut its crude oil production in March to the lowest level since February 2017. The Country delivered on its promise to cut more than pledged in the pact and slashed output by another 280,000 bpd last month, with March production at 9.87 million bpd.
The U.S ‘NOPEC bill’ – Saudi Arabia threatens to ditch dollar oil trades
Saudi Arabia is reportedly threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits.
The No Oil Producing and Exporting Cartels (NOPEC) which was first introduced in 2000, is a U.S. Congressional bill aimed at removing the state immunity shield. By extension, allowing OPEC and its national oil companies to be sued under U.S. antitrust law for anti-competitive attempts to limit the world’s supply of oil and the consequent impact on oil prices.
Report has rightly indicated that the chances of the NOPEC bill coming into force are slim and Saudi Arabia would be unlikely to follow through. Sources within the Saudi’s oil industry reportedly disclosed:
“let the Americans pass NOPEC and it would be the U.S. economy that would fall apart. The Saudis know they have the dollar as the nuclear option.”
Trump’s factor and U.S trade influence
The NOPEC bill has gained momentum since President Trump came into office. Prior to Trump’s election into office, he reportedly backed NOPEC in a book published in 2011. However, despite Trump’s continued tirade against OPEC, he has not yet voiced support for NOPEC as president.
On the contrary, while global trade has been advocating for moves to diversify trade from the dollar, economic superpowers are equalling plotting moves to dilute U.S influence over the world economy. Hence, it would resonate well with oil giant like Russia and consumers such as China and the European Union (EU) if Saudi’s move to ditch dollar sail through.
Saud Arabia’s influence and its Oil firm “Aramco”
Saudi Arabia reportedly controls a 10th of global oil production, roughly on par with its main rivals – the United States and Russia. Its oil firm Saudi Aramco holds the crown of the world’s biggest oil exporter with sales of $356 billion.
Recently, it was reported that Saudi Arabian national petroleum and natural gas company, Saudi Aramco, recorded $111.1 billion in profit for FY 2018 as the world’s most profitable company.
Prices to rise as Venezuela’s Blackout lingers alongside Iraq Production Cut
An earlier report has shown that OPEC’s oil production in March 2019 fell to its lowest level since February 2015, as Saudi Arabia cut more than it had pledged. Also, Venezuela continued to struggle amid U.S sanctions and a major blackout.
The power blackouts currently witnessed by Venezuela has crippled its oil industry and exports. The country reportedly saw its production drop to a 16-year-low, at 740,000 bpd.
Also, OPEC’s second-biggest producer Iraq, cut its production by 100,000 bpd, making its production reduced to 4.57 million bdb in March. This, however, was still slightly above Iraq’s 4.512 million bpd production cap under the deal.
WHO approves protocol for phase 3 clinical trials for COVID-19 herbal medicine
A COVID-19 herbal medicine has gained approval by WHO for phase 3 clinical trial.
The World Health Organization (WHO), in collaboration with the African Centre for Disease Control and Prevention and the African Union Commission for Social Affairs, has approved a protocol for phase 3 clinical trials of herbal medicine for Covid-19.
The Regional Expert Committee on Traditional Medicine for Covid-19, which was formed by the 3 institutions, while giving the approval also endorsed a charter and terms of reference for the establishment of a data and safety monitoring board for herbal medicine clinical trials.
The Director Universal Health Coverage and Life Course Cluster at WHO Regional Office for Africa, Dr Tumusiime, said, “Just like other areas of medicine, sound science is the sole basis for safe and effective traditional medicine therapies. The onset of COVID-19, like the Ebola outbreak in West Africa, has highlighted the need for strengthened health systems and accelerated research and development programmes, including on traditional medicines.’’
The technical documents that were approved are aimed at empowering and developing a critical mass of technical capacity of scientists in Africa to conduct proper clinical trials to ensure quality, safety and efficacy of traditional medicines in line with international standards.
This appears to add to the global effort to develop vaccines for the coronavirus disease, which are at different trial stages. The WHO had disclosed that there are well over 100 Covid-19 vaccines currently under development across the globe with about 8 of them at the phase 3 trial stage.
The phase 3 clinical trials are quite crucial in fully assessing the safety and efficacy of a new medical product. The data safety and monitoring board will ensure that the accumulated studies data are reviewed periodically against participants’ safety.
The late-stage trial will also make recommendations on the continuation, modification or termination of a trial, based on evaluation of data at predetermined periods during the study.
Dr Tumusiime explained that if a traditional medicine product is found to be safe, efficacious and quality assured, the WHO will recommend for a fast-tracked, large-scale local manufacturing. The WHO also noted that through the African Vaccine Regulatory Forum, there is now a benchmark upon which clinical trials of medicines and vaccines in the region can be assessed and approved in less than 60 days.
The Expert Committee Chairman, Professor Motlalepula Gilbert Matsabisa said, “The adoption of the technical documents will ensure that universally acceptable clinical evidence of the efficacy of herbal medicines for the treatment of COVID-19 is generated without compromising the safety of participants.”
The 25-member Regional Expert Advisory Committee on Traditional Medicine for Covid-19 was mandated to support countries to improve on research and development of traditional medicine based therapies against the virus.
It is to also provide guidance on the implementation of the approved protocols to generate scientific evidence on the quality, safety and efficacy of herbal medicines for Covid-19.
COVID-19 forces tenants to request moratoriums from property owners
Tenants demanding moratorium from landlords because of the effects of COVID-19.
The effect of the Coronavirus pandemic is telling on the Real Estate sector, as many occupants have requested moratoriums from property owners or managers.
In separate interviews by Nairametrics, some tenants said that they could no longer afford their rents, hence the need for moratoriums. If denied, a lot of them are ready to move to border towns of Lagos.
A moratorium is a legal authorization to debtors to postpone payment. The document can be obtained by tenants, to prevent the managers or owners of properties from taking legal actions against them.
A banker and resident of Oduduwa Crescent, Ikeja GRA, who simply identified as Kola, said that his landlord had informed him of a planned 25% increment in his rent from April 2020, a month before his rent was due, which he had agreed to.
Unfortunately, in May 2020, his employer (one of the Tier-1 banks) gave him the option of either accepting a 25% pay cut in May or resigning. Considering the fact that he had no side hustle, Kola chose the ‘lesser evil.’
“I took the decision because it pays me to allow a pay cut, than being out of job. At that point, I considered requesting a moratorium, as I have never owed rents before. I could afford to pay the rent, but I didn’t know how long I will be without a job, and paying the rent from my savings was not a wise decision for me. As Expected, the property owner was not comfortable with my request, as he suggested that I relocate to a cheaper facility.”
In his own case, Richard, who was a manager in one of the hotels close to the Lekki toll gate, was not as lucky as Kola. His rent was due by May, the same month his employer asked him to stay at home till further notice.
Efforts to plead with his landlord to buy more time fell on deaf ears, as the owner of the Surulere apartment was bent on collecting the rent.
He said, “I had no choice but to plead for three months to secure another apartment when it became obvious that my employer would not recall us anytime soon. Eventually, I decided to move from Surulere to Magboro where rents are cheaper, and property owners may be reasonable unlike their counterparts in Lagos.”
Kola and Richard are only two among hundreds of breadwinners that lost their sources of income or had pay cuts, especially during the lockdown. A lot of them, whose rents were due between April and July, are currently looking for cheaper residences amidst pressure from their landlords.
No doubt, apartments are cheaper in some border towns as Lagos Akute, OPIC (Wawa), Arepo, and Magboro, all in Ogun State.
For instance, while a self-contain apartment is obtainable between N120,000 to N150,000, a 2-bedroom flat goes between N250,000 to N300,000 per annum, and a 3-bedroom flat is rented between N350,000 to N400,000. In the city centre, such as Ikeja, Gbagada, and Surulere or on the Island, the rents are astronomical.
The heat will be more
A Real Estate practitioner and also the Vice President, Lagos Chamber of Commerce and Industry (LCCI), Gbenga Ismail, explained that the impact of COVID-19 in real estate would be felt later, because of the tenancy/rent structure of the sector.
Unlike what is obtainable in other climes like the United Kingdom (UK) and the United States of America, where rents are renewed on a monthly or quarterly basis, Nigeria may not feel the pressure now, as rents are paid in one or two years’ advance.
Ismail, in an interview with Channels TV, said, “Most people that either lost their jobs, or had their salaries slashed, are likely to have paid their rents in advance before the virus, and that could still ease the tension for now, at least till the end of the year. Right now, what happened is that, by the lockdown period, you won’t feel anything; but by the third or fourth quarter of the year, you start feeling it; only then, would we see how it has affected Nigeria. By then, people won’t be able to pay rents or buy houses as planned. We are not sure of where the monetary issues are going now, and if lending will continue into the real estate sector. We are yet to see some of these things going on. Even in inventories, where developers have put houses out for rent, the concern is who is going to rent them? Before COVID-19, we wait 6 months before houses get rented or leased, but now it may not be less than 12 months. The immediate impact would soon start to reveal itself.”
More plead for a moratorium
Ismail added that more tenants would likely plead for moratoriums, because their businesses may have been affected, and some might have lost their jobs.
“Those who have mortgages and are possibly in the risk areas of losing their jobs will definitely have discussions with their lenders if that happens. I think the mortgage firms have to listen and think of how to help them since the COVID situation is a force majeure – unexpected circumstance. People are being forced to make decisions they did not plan to make,” he added.
In all, the experts urged all stakeholders not to panic, as the phase will definitely pass, and the economy will gradually recover.
COVID-19 Update in Nigeria
On the 20th of September 2020, 97 new confirmed cases and 3 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,242 confirmed cases.
On the 20th of September 2020, 97 new confirmed cases and 3 deaths were recorded in Nigeria, having carried out a total daily test of 2,609 samples across the country.
To date, 57,242 cases have been confirmed, 48,569 cases have been discharged and 1,098 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 482,321 tests have been carried out as of September 20th, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 20th September 2020,
- Total Number of Cases – 57,242
- Total Number Discharged – 48,569
- Total Deaths – 1,098
- Total Tests Carried out – 482,321
According to the NCDC, the 97 new cases were reported from 12 states- Lagos (46), Kwara (12), Rivers (11), Adamawa (4), Niger (4), Ogun (4), Osun (4), Ekiti (3), Imo (3), Kaduna (3), Plateau (2), FCT (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,943, followed by Abuja (5,551), Oyo (3,231), Plateau (3,231), Edo (2,611), Kaduna (2,348), Rivers (2,243), Delta (1,799), Ogun (1,766), Kano (1,734), Ondo (1,597), Enugu (1,234), Ebonyi (1,038), Kwara (1,025), Abia (881), Katsina (848), Osun (817), Gombe (799), Borno (741), and Bauchi (689).
Imo State has recorded 562 cases, Benue (473), Nasarawa (448), Bayelsa (394), Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (254), Adamawa (234), Anambra (232), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.