Business News
Trouble as crude oil price drops to a 7-month low, hits $57 a barrel
The price of crude oil has posted a 7-month low, declining by 4% to $57 a barrel in two days. This is the first time oil price would post a huge fall since January 2019.
The price of crude oil has posted a 7-month low, declining by 4% to $57 a barrel in two days. This is the first time oil price would post a huge fall since January 2019.
According to oilprice.com, Brent oil price hit the lowest level since January and down by over 25% from the highest peak of the year reached in April. Also, Western Texas Intermediate (WTI), dropped almost 6% to $50.52 a barrel, a level which was last seen in mid-January.
The details: An earlier report published by Nairametrics revealed that oil price dropped to below $60 a barrel in the early hours of Tuesday, as trade tension between the U.S and China intensified.
- Meanwhile, financial times also revealed that the latest drop is traceable to the escalating trade war tensions between the US and China as oil demand outlook has been badly hit while inventory is building.
- It has, however, been revealed that other factors pushing the oil price down include reports that China is purchasing oil from Iran despite US sanctions, making the market to lose the earlier tightness.
[READ: Critical times loom for Nigeria as oil price dips below $60 budget benchmark]
Oil price forecast: As oil prices continue free fall in recent weeks, the Energy Information Administration (EIA) has cut its Brent spot price forecast. According to the EIA, Brent spot price forecast has been cut to $64 per barrel in the second half of 2019 and $65 per barrel in 2020 in its August short-term energy outlook (STEO).
- Earlier this week, Fitch Solutions Macro Research (FSMR) analysts made a “major downward revision” to their Brent oil price forecasts.
- Meanwhile, fresh concerns are emerging that oil price may continue its free fall as the escalating trade war between U.S and China deepens.
- Analysts are predicting that the deepening tensions between the US and China, following the decision on Monday by Beijing to allow the renminbi to fall below 7 to the dollar after the US slapped a new set of tariffs on the Asian country, are dampening investors’ sentiment and oil prices.
Can OPEC come to rescue? Crude oil faces a renewed threat of a bear market, and this may become a growing concern for the Organisation of the Petroleum Exporting Countries (OPEC) as it had pledged to regulate the crude oil market throughout 2019.
- Fresh updates from the US Energy Information Administration show that crude inventories are unexpectedly increasing for the first time in eight weeks.
- While OPEC in its last monthly meeting expected demand to rise, it remains uncertain if the group’s crude oil supply cut will tame oil price from further fall until its next meeting on December 5
The Nigerian Economy: In all of these, the Nigerian economy stands the risk of being financially trapped following a continued fall in oil price.
- Oil still remains Nigeria’s main source of revenue and free-fall as currently being witnessed is bad for the economy.
- $60 a barrel falls below Nigeria’s 2019 budget, and largely means a threat to Nigeria’s budget implementation.
- In a report published on Wednesday, Nairametrics revealed that Nigeria’s external reserves had continued to drop in recent weeks and this may largely be traceable to episodes in the global oil market.
[READ FURTHER: Nigeria’s external reserves slip below $45 billion in just two months]
The Massachusetts Institute of Technology and Harvard University have sued President Donald Trump over a new policy that restricts foreign students, whose courses would be taught online, from entering/remaining in the USA.
According to the Wall Street Journal, the suit was filed today in the US District Court in Boston, Massachusetts. The suit alleges that the modifications that were made to the Student and Exchange Visitor Programme (SEVP) by the US Immigration and Customs Enforcement (ICE), came without warning.
The impromptu nature or the modifications, therefore, has left Harvard and MIT with no choice but to think it was “arbitrary and capricious”.
Recall that ICE had on Monday announced the eagerly awaited modifications ahead of foreign students’ return to US campuses for the autumn semester.
One aspect of the modified guidelines, which has thus far proven to be controversial, required foreign students to remain in their home countries if their courses would be taught online. Foreign students already in the US were also directed to leave the country if their courses are online-based.
More details soon…
Economy & Politics
Tax debt payments extended to August 31- FIRS
Tax debtors are to liquidate their outstanding tax liabilities on or before August 31.
The Federal Inland Revenue Service (FIRS) announced it on Wednesday that it has extended the waiver of penalty and interest window on tax debts owned by businesses and individuals from June 30 to August 31, 2020.
In a statement by the Director Communications and Liaison Department, Mr Abdullahi Ahmad. The Executive Chairman of FIRS, Mr Muhammad Nami said the extension is a sequel to palliative measures set up by the FIRS to help businesses and individuals deal with the effects of the Covid-19 pandemic on the economy.
READ MORE: FIRS to deploy new technology in tax collection, as MDAs refuse to pay 7.5% tax
“The latest extension applies to tax audit, tax investigation and desk review assessments, approved installment payment plans under Voluntary Assets and Income Declaration Scheme yet to be fully liquidated,” he said.
He added that there would not be any extension after the August 31 due date.
READ MORE: Nigeria Joins Canada, Thailand and others in taxing digital companies
He urged tax debtors to liquidate their outstanding tax liabilities on or before August 31 in order to partake in the waiver of accumulated interests and penalties.
Nami also advised all businesses and individuals who fall under the waivers to contact their nearest FIRS Regional Debt Management Office and tax controllers for further enquiries.
FEATURED
Diversion points for third mainland bridge closure revealed
There would be a diversion of traffic in 2 phases during the partial closure of the bridge.
The Federal Government has announced the different phases points of diversion of traffic during the partial closure of the Third Mainland bridge for repair works.
This was disclosed during a joint press conference by the Federal Controller of Works in Lagos, Engr Olukayode Popoola, the Lagos State Commissioner for Transportation, Dr. Frederic Oladeinde and the Special Adviser to Governor Babajide Sanwo-Olu on Works, Engr Aramide Adeyoye, on Tuesday at Alausa Ikeja.
During the press conference, the Federal and Lagos State Governments have appealed to motorists and Lagos residents to cooperate with government and appropriate agencies during the 6 months partial closure of the Third Mainland Bridge for maintenance work, which is expected to start on July 24.
They also assured Lagosians that necessary measures would be put in place to reduce gridlocks during partial closure of the bridge as they would work with appropriate authorities to direct and control traffic movement in the affected areas and alternative routes.
Engr. Popoola revealed that there would be diversion of traffic in 2 phases during the partial closure of the bridge between Friday, July 24, 2020 and January 24, 2021.
READ MORE: Lagos Government gives approval to 7 private labs to commence COVID-19 testing
He said the First Phase of the diversion, which will last for 3 months of repairs of the Oworonsoki bound lane of the Third Mainland Bridge, would be for morning traffic from 12:00 am to 1:00 pm from Oworonshoki to Lagos Island on the Lagos Island-bound lane, while the afternoon traffic from 1:00 pm to 12:00 am would be from Lagos Island to Oworonsoki on the Lagos Island-bound lane.
Engr. Popoola said the Phase 2 of the diversion, which would last also for three months of repairs of the Lagos Island-bound lane of the Third Mainland Bridge, would be for morning traffic from 12:00 am to 1:00 pm from Oworonsoki to Lagos Island on the Oworonsoki bound lane, while the afternoon traffic from 1:00 pm to 12:00 am would be from Lagos Island to Oworonsoki on the Oworonsoki bound lane.
Popoola said, “Motorists are advised to also ply these alternative routes: First, from Carter Bridge through Iddo through Oyingbo to join Adekunle ramp inward Oworonsoki. Secondly, from Ijora Olopa through Western Avenue to Ikorodu Road.”
On his own part, the Lagos State Commissioner for Transportation, Dr. Oladeinde said priority will be given to those driving from Mainland to the Island in morning and afternoon to use the Third Mainland while those driving against traffic will use the alternative routes.
READ MORE: FG to shut Third Mainland Bridge for 6 months
Dr. Oladeinde assured motorists that Lagos State Traffic Management Authority (LASTMA) will work with Federal Road Safety Corps (FRSC) in all the alternative routes to ensure that motorists have a smooth journey during the partial closure of the bridge.
The commissioner advised those who don’t have any genuine reason to be on the road to stay at home to reduce vehicular movement during this period while adding that the public vehicles would be available and affordable for road users.
He said: “If you don’t have to travel, I will advise that you stay at home so that we can minimise the number of vehicles on the road. If you can work at home, please do. But if you can’t, we will ensure will be on the road for you to get to your destination as quickly as possible.”
Dr. Oladeinde also advised people of Lagos State to use alternative transport such as ferries. He said there will be an increase in the number of fleets by the Lagos Ferry Services in the morning for people from Ikorodu and Mile 2 as alternative transportation.
READ ALSO: Fourth Mainland Bridge to begin before December
Also speaking, Engr. Adeyoye while appreciating the Federal Government for the repair of Third Mainland Bridge, said Lagos State Government has commenced necessary preparatory works on all the alternative routes in the state to make them motorable for the commuters.
Adeyoye said the state will do its best within two weeks to work on all the roads that may likely cause gridlocks to be free of potholes.
She also warned trucks and vehicles that are not road worthy or serviceable to stay away from Lagos roads.
Federal Government and LASG have appealed to motorists and Lagos residents to cooperate with government and appropriate agencies during the six months partial closure of the Third Mainland Bridge for maintenance work, which is expected to commence on July 24#ForAGreaterLagos pic.twitter.com/yUOOQIwe62
— The Lagos State Govt (@followlasg) July 7, 2020
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