Connect with us
nairametrics

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.

Published

on

Oil revenue, Trouble as crude oil price drops

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).

GTBank 728 x 90
  • 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]

GTBank 728 x 90

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Coronavirus

COVID-19: Ogun orders full reopening of churches, mosques, hotels

Religious centres and other public places have been reopened following the success recorded in flattening the curve of COVID-19.

Published

on

Coronavirus: Ogun State bans cinemas, night clubs, restaurants, other businesses from operating, COVID 19: Ogun State launches digital classes for students

The Ogun State Government has ordered the full reopening of churches, mosques, businesses, hotels, and entertainment centres across the state.

This was disclosed by the State Governor, Dapo Abiodun, in a statement signed by his Chief Press Secretary, Kunle Somorin, via the state’s Twitter handle on Wednesday.

Abiodun stated that the religious centres and other public places had been reopened, following the success recorded in flattening the curve of COVID-19.

According to him, the government is aware that many people are just recovering from the economic hardship imposed by COVID-19, as their activities had been affected by the lockdown, while necessary measures had been put in place to combat the pandemic.

He stated, “In the process of rebuilding the economy, the State Government was irrevocably committed to the successful implementation of the “Building our Future Together” agenda, and would ensure everything possible for people to have increased prosperity that would place the State on a sound footing towards continued development.

GTBank 728 x 90

“Government would improve on testing, just as it continues to monitor the development and not hesitate to do selective lockdown should there be any flagrant disobedience to the set COVID-19 protocols.”

What you should know

GTBank 728 x 90

Governor Abiodun had closed religious centres, businesses and schools in March, as part of moves to flatten the curve of the coronavirus.

He later announced the reopening of only worship centres and schools in August.

Abiodun pegged the number of worshippers for each service at 200, and insisted that services must not exceed one and a half hours.

Continue Reading

Financial Services

CBN reveals framework for the N75 billion Youth Investment Fund

The Nigerian Youth Investment Fund will be funded through the NIRSAL MFB window of the CBN.

Published

on

CBN reveals framework for the N75 billion Youth Investment Fund, Economic Growth, CBN, Governor, Emefiele, CBN releases new capital base, sanctions for Microfinance Banks, Nigerian Banks broadly positive after naira devaluation, Naira hits N465 to $1, Central Bank begins disbursing $100million to hit at currency speculators

The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund.

This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria.

The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion.

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.

GTBank 728 x 90

Objectives of the scheme:

  •  Improve access to finance for youths and youth-owned enterprises for national development.
  •  Generate much-needed employment opportunities to curb youth restiveness.
  •  Boost the managerial capacity of the youths, and develop their potentials to become the future large corporate organizations.

Explore Data on the Nairametrics Research Website

What you should know
Recall that on the 22nd of July, 2020, the Federal Executive Council (FEC) approved the sum of N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023.
The fund was created to support the innovative ideas, skills and talents of Nigerian youths, and to institutionally provide Nigerian youths with a special window for accessing much-needed funds, finances, business management skills and other inputs critical for sustainable enterprise development.
  • The fund targets young people between the ages of 18 and 35 years.
  • Beneficiaries of NMFB, TCF and AgSMEIS loans, and other government loan schemes that remain unpaid are also not eligible to participate.
  • Individuals (unregistered businesses) shall be determined based on activity/nature of projects subject to the maximum of N250,000.
  • Registered businesses (Business name, Limited Liability, Cooperative, Commodity Association) shall be determined by activity/nature of projects subject to the maximum of N3.0 million (including working capital).
  • The tenor of the intervention is for a Maximum of 5 years, depending on the nature of the business and the assets acquired, of which interest rate of not more than 5% under the intervention shall be charged annually.
  • The Federal Ministry of Youth and Sports Development (FMYSD) will collaborate with relevant stakeholders to identify potential training for training/mentoring.
  • The youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to login to the portal provided by the NMFB to apply for the facility.

READ: CBN raises alarm over fraudulent loan offers, investment schemes with charged fees

GTBank 728 x 90
Optics
As a huge percentage of youths are engaged in the informal sector, the NYIF will facilitate the transition of informal enterprises owned by youths into the formal mainstream economy, where they can be supported comprehensively, build a bankable track record, and be accurately captured as active participants in economic development.

Continue Reading

Sports

NFF receives $1 million from FIFA as COVID-19 palliative

Nigerian Football Federation received the sum of $1 million from FIFA as COVID-19 palliative.

Published

on

The Nigerian Football Federation (NFF) has received the sum of $1 million from FIFA as COVID-19 palliative to support male and female footballers in the country.

This was disclosed by Amaju Pinnick in a statement confirming the receipt of the grant from the world football governing federation FIFA, which was seen by Nairametrics on his official Twitter handle.

READ: DEAL: Nigerian Breweries and NFF sign sponsorship agreement

He tweeted, “Huge appreciation to football’s world governing body, FIFA for the $1 million (one million dollars) the Federation has received in the frame of COVID-19 palliatives. The money was received by the Nigeria Football Federation and we re-confirmed the purpose from FIFA two days ago.

“It is imperative to note that, FIFA also sent $600,000 to the Federation for the FIFA Forward 2.0 projects in Binin-Kebbi and Ugborodo, which costs $300,000 each.

GTBank 728 x 90

READ: UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

“This fund is a big boost for the mini-stadia projects in both centres, as it will fast track the completion of the projects slated for the end of March 2021.”

GTBank 728 x 90

Explore Data on the Nairametrics Research Website

What they are saying

Speaking on the receipt of the grant, NFF President said:
The $1 million for palliatives is composed of $500,000 for men’s football and $500,000 for the women’s game. FIFA has also promised to send the Federation an additional $500,000 sometime in January 2021, also as part of COVID-19 palliative efforts.

READ: Football: Manchester United net debt rises by 133% to £474.1million

Speaking of other grants, he added:
On the continent, we have received confirmation from Confederation of African Football (CAF) that the Federation will receive the expected $300,000 from the Confederation on or before Sunday, the 1st of November.”

Jaiz bank ads

With the $200,000, he added that the NFF has already ring-fenced from its sponsors’ funds for the purpose, “the coast will then be clear for us to start the disbursement of funds to the beneficiaries, as captured in our approved template, from next week.”

Fidelity ads

READ: MTN Nigeria posts N975.76 billion revenue for Q3 2020

Even though we are bolstered by the guidelines from FIFA strictly outlying the purposes of these funds as well as the approval of the NFF Executive Board, we will also interface with our auditors, PricewaterhouseCoopers, on each and every line item, to ensure the disbursements conform to global best practices.

The beneficiaries of the fund are expected to ensure 100% compliance to the guidelines, by ensuring that all funds are paid into designated accounts.

READ: Togo, Niger, Benin remit N2.04 billion to Nigeria for power supply

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
act markets
Advertisement
first bank
Advertisement
bitad
Advertisement
Stallion ads
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement