Business News
OPEC, allies plan biggest oil cut ever
OPEC and other oil-producing countries are working on a deal for an unmatched production cut equivalent to about 10% of global supply,
The Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries are working on a deal for an unmatched production cut equivalent to about 10% of global supply.
This was disclosed after the US President Donald Trump asked oil nations to stop the oil rout caused by the Coronavirus pandemic.
Meanwhile, the meeting of OPEC and Russia has been scheduled for Monday, April 6, 2020, but details are still not clear on the distribution of production cuts among the oil-producing countries.
Oil prices had dropped to about $20 per barrel from $64.5 at the beginning of 2020, as more than 3 billion people went into lockdown because of the COVID-19 pandemic, plunging world oil demand by as much as 30 million barrels per day.
President Donald Trump had explained that he spoke with both Russian leader, Vladimir Putin and Saudi Crown Prince Salman, and they both agreed to reduce supplies by 10 million bpd out of total world supply of around 100 million barrels per day.
READ MORE: Hope for Nigeria as Russia opens to production cut deal, announces OPEC meeting)
A source in OPEC explained that any cut in excess of 10 million barrels per day must include oil producers from outside OPEC+, an alliance which has OPEC members, Russia and other oil producers, but excludes oil countries such as Brazil, Canada, Norway and the United States.
Russian President, Vladimir Putin
In addition, crude oil production cuts are to happen with or without OPEC, as global oil storage tanks are almost getting full.
What it means: Many crude oil producers would soon have no choice but to start shutting down oil production.
About 3 billion people around the globe have been put on lockdown to slow the spread of the COVID-19 pandemic, which has affected the health of about a million people globally and killed over 54,000.
The intense decline in oil demand drove crude oil prices to its lowest levels since 2002, negatively affecting budgets of oil-producing countries and causing a massive blow to the American shale oil industry, which cannot remain competitive at low prices.
Business News
Global oil market to re-balance in 2 months’ time
In the meantime, OPEC+ wants to keep the existing production output cuts beyond the June expiry date as part of efforts to rebalance the market. Countries like Saudi Arabia, the United Arab Emirates (UAE) and Iraq, have all reaffirmed their commitment to this effect.
With the uncertainty that still prevails in the global oil market due to the prevailing coronavirus pandemic, analysts have been coming up with different forecasts on the future of the market. The latest forecast is that the market will most likely recover by July 2020.
Crude oil prices and oil demand plunged over the past few months as a result of the pandemic. However, with the lifting of global lockdowns and gradual reopening of global economies, oil prices are expected to rebound. Russia’s energy minister, Alexander Novak, said the global oil supply and the oil demand will most likely rebalance by July.
In the meantime, OPEC+ wants to keep the existing production output cuts beyond the June expiry date as part of efforts to rebalance the market. Countries like Saudi Arabia, the United Arab Emirates (UAE) and Iraq, have all reaffirmed their commitment to this effect.
In his analysis earlier today, OPEC’s Secretary-General, Mohammed Barkindo, urged OPEC+ members not to flout the output cut. According to him, OPEC+ members must remain committed to production cuts despite signs that oil demand is beginning to recover.
(READ MORE: Oil price gains likely to halt over demand uncertainty, as US-China tension intensifies)
On its part, Russia had agreed to cut down its oil production to 8.5 million barrels of crude per day in May and June, down from 10.5 million barrels. There is a possibility that the country could extend the current level of output cut beyond June, a situation that is expected to serve as a major boost in the rebalancing of the oil market.
Last week, the International Energy Agency (IEA) said that it had seen signs that the oil market would rebalance quicker than originally expected after the United States and OPEC implemented the agreed output cut. The development came as a big relief to Nigeria because the rebound of oil prices and the rebalancing forecast will help reduce the country’s fiscal pressure and boost its revenue.
Note that the Brent crude and Bonny light crude sold for about $36 per barrel and over $33 per barrel respectively. These are above the revised budget oil benchmark of $25 per barrel for the 2020 budget.
Business
LIRS further extends deadline for filing annual tax returns by one month
“We constantly debated what other measures could be taken as an organization to support individuals and businesses at this time, hence, the additional one-month extension from June 1, to June 30, 2020.” – Ayodele Subair
The Lagos State Internal Revenue Service (LIRS) has again extended the deadline for filing of Annual Tax Returns from May 31 2020 to June 30, 2020.
This is part of the state government’s effort to provide relief to taxpayers in light of the economic impact of the Covid-19 pandemic. With this development, annual returns for individuals, both employees and self-employed persons, can be filed anytime before June 30, 2020.
In a press release signed by Monsurat Amasa, the head of LIRS’ Corporate Communications Department, the agency urged taxpayers to take advantage of the magnanimity of the government and file their returns. The LIRS’ Executive Chairman, Mr. Ayodele Subair, explained the extension thus:
“As the Lagos State Government keeps abreast of global best practices in containing the Covid-19 pandemic and eases the effects of an economic downturn on taxpayers and residents of the State, LIRS had initially extended the deadline for filing annual tax returns for two months, from the statutory March 31st of every fiscal year to May 31, 2020.
“We constantly debated what other measures could be taken as an organization to support individuals and businesses at this time, hence, the additional one-month extension from June 1, to June 30, 2020.”
(READ MORE: COVID-19: Lagos issues new guidelines, considers full reopening of economy)
He further explained that taxpayers can file the annual returns from the comfort of their homes and offices using the LIRS eTax platforms. They can also generate assessment and payment schedule, and other tax administration matters on the same platform. Updates on business operations and alternative payment platforms are to be found on the verified handles, and the LIRS website.
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