Factory
September 19, 2020 No Comments

Nigeria’s oil output rises by 9% as OPEC forecasts fall in demand

Nigeria’s crude oil production went up by 9% to 1.353 million barrels per day (bpd) in August relative to 1.361 million bpd in July, data from the Organisation of the Petroleum Exporting Countries (OPEC) showed on Monday.

OPEC gave the revelation in its September 2020 Oil Market Report issued on Monday, saying it derived its figures based on ‘direct communication.’ It, however, put Nigeria’s output based on ‘secondary sources’ at 1.482 million last month compared to the 1.480 million recorded in the preceding month, representing a 2% growth.

“Gasoline crack spreads trended downward as gasoline exports to Nigeria fell in August by 16 tb/d (thousand barrels per day) to 0.30 mb/d (million barrels per day), with many of the arrivals held in floating storage towards the end of the month.

“Gasoline floating storage in Nigeria grew by 3.68 mb to 5.16 mb in the last week of August, indicative of excess gasoline availability and limited European gasoline requirements. The gasoline crack spread averaged $8.63/b in August, down by $2.20 m-o-m and $10.18 y-o-y,” OPEC said.

Meanwhile, the oil cartel expects global oil demand to drop more sharply by this year than earlier projection as a fallout of the coronavirus crisis.

OPEC said it saw world oil demand recovering more slowly than expected in 2021, potentially making it hard for it and its allies to support the market.

It stated in the report that demand would fall by 9.46 million bpd this year, dwarfing the 9.06 million bpd decline forecasted a month ago.

OPEC, in a similar move, reduced its demand forecast for next year, saying consumption would jump by 6.62 million bpd, 370,000 bpd lower than projected last month.

Source: Ripples Nigeria

Industry Production
April 21, 2020 No Comments

What does this mean for oil-producing countries like Nigeria?

What does this mean for oil-producing countries like Nigeria?

Oil producing countries have different benchmarks their commodity is valued against. Nigeria crude oil, for instance, is benchmarked against the Brent Crude which as at 11:41 pm on Monday is valued at $25.57 while the West Texas Intermediate, although still negative, has slightly appreciated to $-16.20.

The Brent Crude is considered the international benchmark. Other benchmarks include but not limited to Mexican Basket (currently trading at $14.35), Indian Basket (currently trading at $20.56) and Dubai (currently trading at $28.11).

What does the negative value mean?

The current negative valuation of the WTI is for the May delivery. June delivery is trading at a still low of $22 a barrel.

Sellers of the May contract have just one more day to find buyers, but with storage in short supply, they are struggling to find takers.

The negative valuation therefore simply implies sellers are paying others to take the commodity.

Why would oil sellers pay others to take the commodity?

In the oil market, the law of supply and demand is subtle. The price of oil is set in oil futures market. This means buyer signs a contract to buy barrels at a specified amount at a particular date in the future. Under a futures contract, buyers and sellers are expected to go through the deal as implied at the specified date.

A seller might have lots of contracts and lesser space. So, will need to offload the present commodities to accommodate future commodities.

Does it mean Nigeria’s crude oil is worthless?

No. Nigeria oil is not worthless and it is currently not trading at the negative. The current worth is $25.57 a barrel.

However, since the nation’s 2020 budget was predicated at $53 per barrel of crude oil, this may present economic problems. President Muhammadu Buhari has however constituted a committee to revisit the budget since the emergence of the drop in oil prices.

What is the cause of the fall in price?

The decline in oil prices has been persistent for a while. According to the US Energy Information Administration (EIA), Crude oil prices were generally lower in 2019 than in 2018.

However, the coronavirus disease (COVID-19) outbreak made things worse in 2020. Companies can no longer produce in full capacity and thus lower demand for the commodity (oil). And oil-producing countries are still producing massively, making the market overflooded.

Any hope for the future?

Yes. If the coronavirus disease can be completely curbed, there will surely be an improvement in the oil prices since companies’ production will return to normal; invariably demand is expected to be more than present.

What can world leaders do?

There is a need for concerned parties to agree on a way forward. It is important that all nations control their production to stabilise the market.

In the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting held via videoconference, on Sunday, April 12, 2020, it agreed to, “Adjust downwards their overall crude oil production by 9.7 mb/d, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020.

“For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 7.7 mb/d.”

Industry
April 21, 2020 No Comments

Essential protective measures against the new coronavirus

Stay aware of the latest information on the COVID-19 outbreak, available on the WHO website and through your national and local public health authority. Most people who become infected experience mild illness and recover, but it can be more severe for others. Take care of your health and protect others by doing the following:

 

Wash your hands frequently
Regularly and thoroughly clean your hands with an alcohol-based hand rub or wash them with soap and water.

Why? Washing your hands with soap and water or using alcohol-based hand rub kills viruses that may be on your hands.

Maintain social distancing
Maintain at least 1 metre (3 feet) distance between yourself and anyone who is coughing or sneezing.

Why? When someone coughs or sneezes they spray small liquid droplets from their nose or mouth which may contain virus. If you are too close, you can breathe in the droplets, including the COVID-19 virus if the person coughing has the disease.

Avoid touching eyes, nose and mouth
Why? Hands touch many surfaces and can pick up viruses. Once contaminated, hands can transfer the virus to your eyes, nose or mouth. From there, the virus can enter your body and can make you sick.

Practice respiratory hygiene
Make sure you, and the people around you, follow good respiratory hygiene. This means covering your mouth and nose with your bent elbow or tissue when you cough or sneeze. Then dispose of the used tissue immediately.

Why? Droplets spread virus. By following good respiratory hygiene you protect the people around you from viruses such as cold, flu and COVID-19.

If you have fever, cough and difficulty breathing, seek medical care early
Stay home if you feel unwell. If you have a fever, cough and difficulty breathing, seek medical attention and call in advance. Follow the directions of your local health authority.

Why? National and local authorities will have the most up to date information on the situation in your area. Calling in advance will allow your health care provider to quickly direct you to the right health facility. This will also protect you and help prevent spread of viruses and other infections.

Stay informed and follow advice given by your healthcare provider

Stay informed on the latest developments about COVID-19. Follow advice given by your healthcare provider, your national and local public health authority or your employer on how to protect yourself and others from COVID-19.

Why? National and local authorities will have the most up to date information on whether COVID-19 is spreading in your area. They are best placed to advise on what people in your area should be doing to protect themselves.

Protection measures for persons who are in or have recently visited (past 14 days) areas where COVID-19 is spreading
Follow the guidance outlined above.

Stay at home if you begin to feel unwell, even with mild symptoms such as headache and slight runny nose, until you recover. Why? Avoiding contact with others and visits to medical facilities will allow these facilities to operate more effectively and help protect you and others from possible COVID-19 and other viruses.
If you develop fever, cough and difficulty breathing, seek medical advice promptly as this may be due to a respiratory infection or other serious condition.

Call in advance and tell your provider of any recent travel or contact with travelers. Why? Calling in advance will allow your health care provider to quickly direct you to the right health facility. This will also help to prevent possible spread of COVID-19 and other viruses.

Source: WHO

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