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Business News

Nigeria’s Bonny light crude up by 22.7% as global oil demand improves

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Crude oil prices, bonny light, 4 key reasons why Brent crude might slip back to $35 per barrel, Crude oil prices resume weekly gains as demand picks up 

The recovery of crude oil prices from last month’s unprecedented crash seems to be moving swiftly, as more countries ease their coronavirus lockdowns and output cuts agreed by OPEC+ and other top oil-producing countries start to whittle down the supply glut.

The oil market recovery continued on Tuesday, with oil prices continuing the upward swing as demand started improving and some economies began to open up.

Bonny Light Spikes: The Nigerian headline crude, Bonny light, sold for $23.24 per barrel on Tuesday, May 5, 2020, compared to the $18.94 per barrel which it sold for the previous day. This represents a whopping 22.7% increase, the highest in about 3 weeks.

Also, in a related development, the Brent crude surged to $31.06 per barrel, while the American WTI crude is selling at $24.69 per barrel. Oil prices have been on an upward swing, just as the market expects improvement based on the hope of output cuts by OPEC+ and oil-producing countries, and a gradual increase in oil demand globally.

READ ALSO: COVID-19: Short-term reforms needed to reduce impacts on the Nigerian economy -NESG

According to a monitored report from oilprice.com, oil demand has risen by 2.5 million barrels per day from its low point in mid-April 2020. An American Petroleum (API) report showed that the crude oil inventory was expected to rise to 8.44 million barrels just last week as against the 9.98 million barrels that were expected to be achieved a week before then.

The oil market has been in turmoil following the outbreak of the coronavirus pandemic and the attendant global lockdown as part of measures to contain the disease.

This had led to an unprecedented crash in crude oil prices which seriously affected the Federal Government’s 2020 budget implementation. In response to that, the oil benchmark for the 2020 budget had to be reviewed downwards from $57 per barrel to $30 per barrel.

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The Minister for Finance, Budget and Economic Planning, Zainab Ahmed, in a webinar conference on Covid-19 and Government’s fiscal policy decisions on crash in oil prices, suggested that the Government is planning to further reduce the oil benchmark to $20 per barrel to reflect the current price of crude. The production output was also revised from approximately 2.1 million barrels per day to 1.7 million per day.

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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Business

FG explains why Lagos-Ibadan rail line was not linked to the sea

The government in its explanation said that the delay was due to disruption by trucks going in and out of the port complex.

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FG needs $656 million to complete Lagos-Ibadan railway project – Amaechi, Nigeria loses N150 billion annually to shipping tariffs, Ibadan to Kano rail construction

The Federal Government has stated why the China Civil Engineering Construction Company (CCECC) Nigeria Limited could not link the final part of the Lagos-Ibadan rail line to the sea.

The government in its explanation said that it was due to disruption by trucks going in and out of the port complex.

According to a press statement signed by the Director, Press and Public Relations of the Federal Ministry of Transportation, Eric Ojiekwe, this disclosure was made by the Minister of Transportation, Rotimi Amaechi, while on a routine tour of the Lagos-Ibadan rail line project on Saturday, April 10, 2021.

The Minister pointed out that the original blueprint for the Lagos-Ibadan rail line project was not adhered to by CCECC Nigeria Limited and TEAM consortium and therefore warned that the master plan of the soon to commence Ibadan-Kano rail line project should not be changed.

The statement from the ministry partly reads, “The Nigerian Government has restated its commitment to connect the whole country by rail with the soon to commence Ibadan-Kano Standard Gauge Rail project.”

Amaechi forewarned that the master plan of the soon to commence project should not be changed as the original blueprint for the Lagos-Ibadan wasn’t adhered to by Messrs CCECC Nigeria and TEAM consortium. The Minister who rode the train from Ebute-Meta to the 8.72 km Apapa Port Spur line, informed the media that the inability of Messrs CCECC Nigeria to link the final part of the rail line down to the sea is rather due to disruption by trucks going in and out of the port complex.’’

The Minister had noted that the Federal Government has paid its share of the counterpart funding of the Ibadan-Kano rail line project and is waiting for China-Exim bank to ratify its side of the agreement for the project to commence.

He also advised the Nigerian Railway Corporation (NRC) to acquire more land around the train stations and the rail tracks for future development adding that this will be near impossible to do in the future as whatever space available now would have been taken over by businesses attracted to the rail line.

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In case you missed it

It can be recalled that full commercial train services commenced on the Lagos-Ibadan rail line after train operations commenced on December 7, 2020, with only Lagos, Ibadan and Abeokuta residents enjoying the train services.

This is because other minor and major stations along that route were yet to be completed.

 

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Manufacturing

Industrial Index loses -12.39 points, as BUA and Lafarge Cement shares top losers list

The NSE Industrials index lost 12.39 index points in the first trading week in the month of April.

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Manufacturing: Activity levels pick up albeit readings still below water

The Nigerian Stock Exchange Industrial Index at the close of trading activities for the first week in the month of April closed on a bearish note, following a 0.66% decrease in the shares of BUA CEMENT and Lafarge.

At the close of trading activities on the Nigerian Stock Exchange on the 9th of April 2021, the industrial index depreciated by 55.01 index points, to close lower at 1,928.18 index points for the week.

When compared to the overall performance of the market, the NSE Industrial index underperformed, noting that the NSE All-Share Index and Market Capitalization depreciated by 0.66% to close the week at 38,866.39 and N20.3350 trillion respectively.

READ: COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says

What you should know

The NSE Industrial Index was designed to provide an investable benchmark to capture the performance of the Industrial Sector. It comprises the most capitalized and liquid companies in the industrial sector and is based on the market capitalization methodology.

The index tracks the performance of ten industrial companies on the Nigerian Stock Exchange which includes Dangote, BUA, and Lafarge Cement.

The overall performance of the companies for the week was bearish, as the index closed on a negative note driven by the decrease in the share price of BUA Cement and Lafarge.

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MEYER (19.51) was the only gainer for the week, while BUACEMENT (-1.09%) and LAFARGE WAPCO (-3.00%) were the only losers for the week.

GAINER

  • MEYER up by19.51% to close at N0.49.

LOSER

  • WAPCO down by -3.00% to close at N21.00.
  • BUACEMENT down by -1.09% to close at N72.70.

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