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Business News

Crude oil price plunges by 5% over demand slump, supply glut concerns

Despite the deal by the OPEC and its allies, in addition to the intervention of US President, the volatility of the oil market still continues unabated. 

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Despite the deal by the Organization of Petroleum Exporting Countries, its allies (OPEC+) and other top oil producers, in addition to the intervention of US President, Donald Trump, the volatility of the crude oil market still continues unabated.

Available reports from oilprice.com shows that crude oil prices fell by about 5% at $28 per barrel on Wednesday, April 15, 2020. This could be attributed to persistent oversupply and the consistent fall in demand due to global lockdown caused by the coronavirus pandemic.

The Brent crude crashed by more than 5% as it sold for about $28, and the US West Texas Intermediate (WTI) crude slumped by 0.55% as it sold for $20 per barrel. Also, the Bonny light crude had an over 7% drop to sell at $24.46 per barrel.

The International Energy Agency (IEA) on Wednesday, predicted a 29 million barrel per day oil demand slump for April. The slump is to a level that has not been witnessed for over two and a half decades, and it further said that no output cut will fully make up for the decline in prices in the oil market.

(READ MORE: Crude Oil: “Historic” production cuts; Implications for Nigeria)

Some analysts have predicted more pressure with adverse effects on the oil market as long as the demand does not improve. However, with the global lockdown and restrictions at the moment, this seems like a tall order.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

Agip shut oil facility in Bayelsa due to oil spillage, environmental pollution reported

Agip on Wednesday confirmed an oil leak, resulting in a shutdown.

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The Nigerian Agip Oil Company (NAOC) has confirmed the shutdown of its Idu oilfields at Egbebiri settlement within Biseni in Yenagoa Local Government Area in Bayelsa, due to an oil spillage.

A Joint Investigative Visit (JIV) report on the incident said that the leakage at the facility could be traced to equipment failure due to a rupture at the wellhead.

According to a report from the News Agency of Nigeria (NAN), Eni, the parent company of NAOC, in a response statement, said the facility was shut down to prevent further damage to the environment.

READ: Shell wants oil spillage case tried in Nigeria, but victims say no 

What Eni is saying

An Eni spokesperson on behalf of the Italian Energy firm, in a statement, said, “As soon as the incident was reported, we activated our oil spill response, shut in the well, and notified government regulatory agencies.

“The Joint Investigation Visit (JIV) was carried out on 09/05/2021, with the participation of community representatives and the government regulatory agencies.

“The event occurred within the Company’s wellhead location which is paved and walled round. There is no significant third-party impact,” Eni stated.

READ: UK court ruling affects acquisition of Shell’s oil block by Governor Wike 

Hotflex

Environmental Rights Group reports environmental degradation

An environmental rights group, Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), however, said that the incident which discharged crude and associated gas had severely polluted the environment.

The Non-Governmental Organisation said that a visit to the spill site showed pictorial evidence of the crude spreading beyond NAOC’s right of way as nearby vegetation were affected as a result of the crude impact.

The Head of Field Operations at ERA/FoEN, Mr Alagoa Morris, in a field report on the spill said the Idu fields was notorious for frequent spills caused by equipment failure.

He said, “The people of Egbebiri in Biseni kingdom have experienced several oil spills over the years. And all the oil spill incidents documented by the Environmental Rights Action/ Friends of the Earth Nigeria (ERA/FoEN) in this community environment have occurred as a result of equipment failure and on Wellheads.

“ERA/FoEN has had cause to visit the environment of Idu Well 5 and 11 located within the same place in the past and it has always been Idu Well 11 spewing crude oil into the environment.

“Available records from ERA/FoEN indicate that there have been previous oil spills from this particular Idu Well 11 operated by Agip. Before concluding this Field Report, ERA/FoEN confirmed that Joint Investigation Visit (JIV) was carried out on Sunday, 9th May 2021.

“This is why the official Spill Reference No 2021/LAR/028/058 is indicated in this report; sourced from the JIV report. Cause of spill was attributed to equipment failure,” ERA/FoEN stated.

Jaiz bank

The report quoted a resident of the community simply identified as Georgie as saying that the spill incident of May 7 spilled oil from around 10 p.m till about 8 a.m the next day before the leak was stopped adding that the level of damage was enormous.

What you should know

It can be recalled that in a similar circumstance, Shell Petroleum Development Company reported an oil pipeline spillage at its Okordia-Rumekpe 14-inch crude truck line, discharging about 213 barrels of crude oil into the Ikarama community in Bayelsa State and polluting about 1.34 hectares of land.

This new leakage is the latest in a series of oil spillages by the multinational oil exploration and production companies, which has put them in conflict with the host communities.

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Energy

Nigeria records system collapse during holidays

Nigeria’s national electricity grid collapsed on Wednesday morning.

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Abuja, Ikeja Discos top list in collection efficiency in Q1 2020- NERC, Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP), Nigeria ranks eight African country with well-developed electricity regulatory frameworks, as Uganda tops.

The Nigerian grid has experienced a partial collapse, dealing a blow for stay at home Nigerians during the holidays.

This was confirmed in a statement by the Eko Electricity Distribution Company (EKEDC), as seen by Nairametrics.

What EKEDC is saying about the grid collapse:

“Dear customer, there is a partial system collapse on the National Grid. Our TCN partners are working to restore supply immediately. Please bear with us.”

According to latest reports, partial restoration of power is already occurring across the country.

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