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OPEC cites vaccine as most important factor for oil in 2021 as Nigeria pushes for cuts

Nigeria’s is pushing for Oil countries to maintain current OPEC outputs

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Saudi Arabia and Russia agree to extend output cuts with a condition

HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy and Chairman of the OPEC and non-OPEC Ministerial Meeting, cited the discovery and administration of Covid-19 vaccine as the most important factor for oil in 2021.

He made this remark on Monday, January 4th, 2021, at the 13th OPEC and non-OPEC Ministerial which is taking place via videoconference.

READ: What next for Oil amid rising COVID-19 cases?

The chairman started by extolling the collaborative effort put together by OPEC+ countries in cutting back oil production and driving up prices to the $50 levels after the drop to under zero recorded earlier in 2020 when leading countries like Saudi Arabia and Russia fell out and dumped supplies in the market.

According to Salman,

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I am sure that each of us has a story to tell of the rollercoaster ride we experienced, and of the trials and tribulations we faced in the year just gone. But when the historians look back on this period, we should hope they write a big chapter on the extraordinary successes OPEC+ has achieved in 2020, in the face of such acute adversity.

READ: Nigeria’s crude oil export earnings rebounded by 116% in November – OPEC

Not only did we achieve the biggest ever cuts to oil supply, but we also saw those cuts through, in a  disciplined and united manner, that said a lot about the effectiveness of our joint efforts. We achieved the highest levels of conformity in the four years OPEC+ has been operating, and for the first time we agreed a mechanism for compensation to make up for any past slippage from our goals.

He then referred to the arrival of the Covid-19 Vaccine as a light at the end of the tunnel citing the increased economic activity across the world as a major plus for oil demand.

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READ: Oil prices plunge over OPEC+ drama

Our collaborative approach has helped us go a long way towards rebalancing global oil markets after the shocks of last year. But now, as we see light at the end of the tunnel, we must – at all costs – avoid the temptation to slacken off our resolve. It is true that the arrival of several vaccines against the COVID-19 virus is a very welcome sign.

I said before that vaccination would be the single most important factor in bringing about economic recovery, leading to a sustained improvement in demand for oil. We have seen this in the general return to optimism within the market since the first vaccines were authorized late last year.

READ: OPEC+ forced to delay talks as disagreement in the cartel deepens

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Nigeria Supports Oil Cuts

OPEC and Non-OPEC Members (OPEC+) will continue their meeting on Tuesday to decide production cuts for February 2021 as oil prices climbed to $53 per barrel, the highest since March 2020.

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According to Reuters, “Russia and Kazakhstan had backed raising production while Iraq, Nigeria and the United Arab Emirates suggested holding output steady.” The apparent deadlock has pushed discussion further into Tuesday and it is very likely that the oil cartel will reach a decision to keep their production cuts. According to reports, Russia is pushing for an increase of 500,000 bpd.

READ: NNPC, only Nigerian company to cut losses by N800 billion in one financial year – GMD

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Oil production cuts are estimated at 7.2 mbpd in January compared to 7.7mbpd in December an increase of 500,000bpd

Reuters also reported that Nigeria’s OPEC Secretary-General Mohammad Barkindo had warned OPEC+ experts of downside risks facing the oil market.

READ: Oil tanker volumes dropped by 18.6% Year-Over-Year in July – Lloyd’s List Intelligence

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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1 Comment

  1. Anonymous

    January 5, 2021 at 10:47 am

    Good news
    Thanks❤🌹😊

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Energy

First cargo of Nigeria’s newest crude grade, Ayala, to arrive Europe

The first export cargo of Nigeria’s newest crude grade, Anyala, is reported to be on its way to Northwest Europe.

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Oil tanker volumes dropped by 18.6% Year-Over-Year in July - Lloyd’s List Intelligence, First cargo of Nigeria’s newest crude grade, Ayala, to arrive Europe

The first export cargo of Nigeria’s newest crude grade, Anyala, is reported to be on its way to Northwest Europe.

According to a report from S&P Global Platts, while quoting trading and shipping sources, the cargo is likely to travel from Fos-sur-Mer to the Cressier refinery in Switzerland through the SPSE pipeline.

It reported that Data Intelligence firm, Kpler, said the Aframax Minerva Clara loaded a 700,000 barrel stem of Anyala crude from the Abigail-Joseph floating production, storage, and offloading vessel on January 10 with the tanker on its way to the Fos-sur-Mer terminal, located at France’s Mediterranean port of Marseille.

The report also said that trading house Vitol had chartered this tanker, as it has a stake in indigenous producer FIRST E&P, which is the operator of the Anyala West oil fields, located in the shallow waters of the Niger Delta.

This is as a market source said the cargo is likely to travel from Fos-sur-Mer to the 68,000 b/d Cressier refinery in Switzerland, which is operated by Varo Energy, through the SPSE pipeline.

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Varo Energy is a joint venture between Vitol, private equity fund, the Carlyle Group, and private investment fund Reggeborgh.

What you should know

  • The new crude is from Nigeria’s shallow-water Anyala West oil fields in the Niger Delta, which struck first oil in November. Anyala is the country’s newest oil development since the start-up of the giant Egina field in late-2018.
  • Anyala has been labeled a medium sweet crude grade, similar in quality to Nigeria’s flagship crude Bonny Light and when refined, Anyala will produce a high yield of middle distillates, making it attractive to both simple and complex refineries.
  • It is also reported that a second cargo will load in March, with some Asian refiners already showing buying interest.

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Energy

Price Watch: Consumers paid more for diesel and less for petrol in December

The December 2020 NBS report shows that consumers paid more for diesel and less for petrol than they did in November 2020.

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Updated: Petrol pump price increased to N151.56 per litre

The Price Watch report released by Nigeria Bureau of Statistics (NBS) for the month of December 2020 revealed that consumers paid more for Diesel (Automotive Gas Oil) and less for Petrol (Premium Motor Spirit), compared to that of November 2020.

The average price paid by consumers for diesel increased by 0.28%, from N223.74 in November 2020 to N224.37 in December 2020, while the average price paid by consumers for petrol decreased by 0.94% from N167.27 in November 2020 to N165.70 in December 2020.

Key highlights of the report

Diesel

  • Consumers in Taraba (N266.00), Adamawa (N262.50) and Zamfara (N257.50) paid the highest average price for Diesel.
  • While consumers in Kwara (N195.00), Gombe (N197.50) and Osun (N201.09) paid the lowest average price for Diesel.
  • Overall, consumers in North West (N240.57), North East (N238.88) and North Central (N226.37) paid the highest average price for Diesel, while consumers in South West (N209.27), South East (N209.35) and South South (N216.25) paid the lowest average price.

Petrol

  • Consumers in Abia (N176.19), Kwara (N172.43) and Kebbi (N169.92) paid the highest average price for petrol.
  • While consumers in Kaduna (N155.00), Katsina (N160.25) and Bauchi (N162.57) paid the lowest average price for petrol.
  • Overall, consumers in South East (N168.04), North Central (N166.94) and South South (N166.53) paid the highest average price for petrol, while consumers in North West (N163.79), North East (N164.47) and South West (N164.92) paid the lowest average price.

Since a lot of manufacturing companies rely heavily on diesel to power their machinery and equipment, the increase would have added to their cost of operations, culminating in consumers paying more for goods and services.

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Also, one would have expected that the reduced price of fuel in December 2020 would lead to lower transport fares for commuters during the festive season, but that was not the case.

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Energy

LPG: Nigerians paid more to refill 12.5kg gas cylinders in December

Nigerians paid more money to refill their 12.5Kg gas cylinder in December than they did in November 2020.

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Prices of Kerosene, Cooking Gas and Diesel

The average price for refilling 12.5kg cylinder of liquefied petroleum gas (LPG) increased by 1.75% in December compared to the month of November, according to the NBS report for December 2020.

The average cost of refilling the 12.5kg gas cylinder moved from N4,082.97 in November to N4,154.28 in December 2020.

According to the NBS report, the average price for refilling a 5kg cylinder of cooking gas increased by 0.12% month-on-month to N1,949.75 in December 2020 from N1,947.47 in November 2020.

READ: Techno Oil commences mass production of locally-made gas cylinders

Key highlights

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  • Bauchi (N2,489.12), Borno (N2,396.69) and Adamawa (N2,392.88) recorded the highest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas in the month of December 2020.
  • Enugu (N1,563.75), Imo (N1,678.89) and Oyo (N1,691.67) recorded the lowest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas.
  • Delta (N4,838.46), Cross River/Sokoto (N4,800.00) and Akwa Ibom (N4,614.49) recorded the highest average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas.
  • While, Kaduna (N3,191.67), Zamfara (N3,462.50) and Niger (N3,500.00) recorded the lowest average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas.

READ: Petrol importation drops by 512 million litres in 3 months

LPG is fast becoming an alternative to firewood and kerosene as a means of cooking for most homes especially in urban areas in Nigeria. LPG is cleaner and more efficient than kerosene in cooking.

LPG should be made much more available and affordable to reduce the cost of living for most Nigerians.

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