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Oil prices hit the biggest daily decline on COVID-19 resurgence, inventories

This year has been a turbulent one for the oil market as crude oil prices went negative for the first time in history.

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CRUDE OIL, U.S Shale, Naira under pressure, as crude oil hits $25 per barrel, Oil Price: A dead cat bounce in the making?, Bears tear Crude oil futures into shreds as Brent slumps more than 20%

This year has been a turbulent one for the oil market as crude oil prices went negative for the first time in history. This was closely followed by one of the most dramatic rallies the industry has ever seen as the oil market stabilizes.

However, a resurgence of COVID-19 cases in the United States which is compounded by another record build up in US oil inventories and a gloomy economic forecast from the Federal Reserve Chairman, Jerome Powell has seen the oil prices hit their biggest daily decline since April 27. The lack of demand and supply glut has once again taken centre stage.

The Brent crude lost over 8% to sell at about $38 per barrel and the American WTI lost declined by about 9% to sell at about $36 per barrel.

According to Energy Information Administration (EIA), the US oil inventories unexpectedly rose by 5.7 million barrels of crude oil to 538.1 million barrels, which is contrary to the earlier predictions of 1.45 million barrel build-up. This is due to the arrival of supplies that were bought by refiners when Saudi Arabia flooded the market in March and April.

Read Also: Why are oil prices down despite a successful OPEC meeting?

The high inventory, together with the recent announcement of an unemployment rate of almost 9.3% by the end of 2020 by the US federal reserve, has put more pressure on the oil market. It is predicted that it could take years to get back to pre-pandemic employment levels. The US federal reserve had also projected that the world’s biggest economy will shrink by 6.5% this year.

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The resurgence of the coronavirus pandemic has been the main cause of the oil market collapse. It took almost 3 months to hit I million confirmed cases, whereas it took only 6 weeks to hit 2 million mark with many states reporting significant spikes.

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Analysts have said that the prices have come under pressure again over concerns about the slow pace of the demand recovery.

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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

NNPC to provide free conversion services to motorists to switch from PMS to autogas

The NNPC has revealed plans to help motorists switch from Premium Motor Spirit (PMS) to Autogas.

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The Nigerian National Petroleum Corporation (NNPC) has disclosed that it is going to provide free conversion services in some selected NNPC retail filling station in the country.

This is part of the effort of the corporation aimed at assisting interested motorists to switch from Premium Motor Spirit (PMS) popularly known as petrol to Autogas as the Federal Government rolls out an autogas programme called the National Gas Expansion Programme.

This was disclosed by the Group Managing Director of NNPC, Mele Kyari, on Tuesday, December 1, 2020, while delivering his address at the Presidential Virtual Rollout of the National Gas Expansion Programme (NGEP).

While delivering his address, Kyari pointed out that the areas of focus with existing Autogas service stations include the Federal Capital Territory Abuja, Kaduna, Kano, Kogi, Kwara, Ogun, Ondo, Oyo, Lagos, Edo, Delta, Rivers and Bayelsa States.

The statement from Kyari partly reads, ‘’To support this effort, NNPC is providing free conversion services in some selected NNPC retail filling stations to assist interested motorists switch from PMS to Autogas, especially in areas with existing Autogas service stations in the Federal Capital Territory Abuja, Kaduna, Kano, Kogi, Kwara, Ogun, Ondo, Oyo, Lagos, Edo, Delta, Rivers and Bayelsa States.’

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The NNPC boss revealed that the state-owned oil corporation is expanding this initiative to all NNPC retail filling stations across the country, while also assuring motorists of steady availability of Autogas at competitive prices.

He also said that NNPC is expanding its natural gas footprint across the country in order to support industrialization and job creation through its various ongoing gas infrastructure projects which includes Obiafu-Obrikom-Oben (OB3) gas pipeline project connecting East and West.

Others are Escravos-Lagos Pipeline System (ELPS 11 which is expected to boost supply to the western corridor and the AKK gas pipeline that will supply gas to Abuja, Kaduna and Kano states.

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What you should know

  • President Muhammadu Buhari today performed the virtual rollout of autogas programme called the National Gas Expansion Programme. The programme, which involves the conversion of fuel-powered cars, generators from petrol to gas, is aimed at deepening domestic usage of natural gas in its various forms.
  • The programme is also in line with the Federal Government’s plan to make gas the first choice source of cheaper and cleaner energy. This follows the deregulation of the downstream sector of the oil industry with sharp increases in prices of petrol.

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Energy

Senate confirms 6 NERC commissioners, drops Chairman-nominee

Six nominees for the board of the Nigerian Electricity Regulatory Commission (NERC) have been confirmed as commissioners.

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National Assembly approves Federal Government’s plan to borrow $11 billion in 2021, Senate urges FG to diversify from crude oil to natural gas production , Senate seeks textile importation ban , Senate receives six aviation sector bills from Buhari , PenCom: Constitute a board, NASS and pension operators tell FG, Nigeria’s total debt now N33trn —Senate, Senate confirms appointment of board members for NDIC, law reform commission, Senate to confirm reappointment of Danbatta as NCC boss, Senate investigates claims of NELMCO, AEDC over govt asset, Senate Investigate Banks over customers exploitation and high fees, 2021 Budget: Senate sets motion for budget defense, commences 2020 review, #EndSARS: States affected by hoodlums should get 1% VAT - Senate

The Nigerian Senate has confirmed the nomination of six members for the board of the Nigerian Electricity Regulatory Commission (NERC) as commissioners.

The legislators also dropped, Prof. Akintunde Akinwande, the nominee for the Chairman position due to his absence from the screening.

This was disclosed by the senate committee on Power, Steel Development and Metallurgy on Tuesday.

The confirmed nominees are Sanusi Garba (North-West) as vice-chairman; with Nathan Rogers Shatti (North-East), Moses Arigu (North-Central), Dafe Akpedeye (South-South), Frank Okafor (South-East) and Musiliu Oseni (South-West).

The committee recommended that President Muhammadu Buhari present another nominee to replace Akinwande.

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What you should know

President Buhari had asked the Senate to confirm Sanusi Garba as Executive Chairman of the Nigeria Electricity Regulatory Commission.

He also sought the Senate nod for the confirmation of Dr Musiliu Oseni as vice chairman; and Aisha Mahmud as commissioner.

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The request was contained in a letter dated 15th October, 2020, and read on the floor during plenary by the Senate President, Ahmad Lawan.

 

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Energy

FG to deliver 1 million vehicle conversion to autogas by end of 2021

The FG’s Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of 2021.

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FG to deliver 1 million vehicle conversion to autogas by end of 2021

The Federal Government has revealed that its Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of next year.

The implementation of this programme by the government will herald the clean energy transition for Nigeria and the delivery of cheap transportation.

This was disclosed on Sunday, November 29, 2020, by the Federal Government via tweets on its official Twitter handle.

READ: 25 million Nigerians to pay N4,000 monthly for solar power system

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READ: N75 billion Nigerian Youth Investment Fund to be rolled out before end of October – Minister

The rollout is the culmination of the resolve of President Muhammadu Buhari-led government to deepen domestic usage of natural gas in its various forms. It is also in line with the government’s plan to make gas the first choice source of cheaper and cleaner energy for Nigerians in their personal and industrial use.

(READ MORE: FG gives reasons why it is repackaging its social intervention programmes)

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The government also stated that there will be a commencement of formal dispensing of Autogas (CNG and LPG) products at two NNPC retail stations.

In addition, there will be a handover of CNG-powered mass transport buses to NLC, in fulfilment of the agreement during recent negotiations. This agreement was reached with labour during negotiations and in recognition of the role organized labour plays in the quest to bring relief to ordinary Nigerians.

READ: Cornerstone Insurance Plc projects PAT of N537.4million in Q1 2021

What you should know 

Nairametrics reported in September that the Minister of State for Petroleum Resources, Timipre Sylva revealed that Nigerians can now convert cars using petrol to gas, which is cheaper, with effect from October 2020.

The Department of Petroleum Resources also ordered 9,000 filling stations nationwide to begin the installation of facilities for gas products.

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READ: PIB may be passed by first quarter of 2021 – Sylva

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In October, the Federal Government estimated that the Compressed Natural Gas (CNG) will cost N97 per litre, as it had promised to provide alternatives to the Premium Motor Spirit (PMS), otherwise known as petrol, for poor Nigerians.

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