Oil prices increased in the global commodities market yesterday after data showed that U.S inventories fell sharply. The market expect demand to increase in US as weak dollar reduce energy costs amid success recorded at Middle East peace talk.

Brent crude rose to $72.49 per barrel while the US benchmark West Texas Intermediate also increased to $68.83 per barrel in the market yesterday. Data from the American Petroleum Institute ,API, showed a larger-than-expected drop in US crude oil stocks which supported the upward movement in prices.

API reported a decrease of 5.93 million barrels in US commercial crude inventories last week, contrary to market expectations of a 250,000 barrel increase, fostering optimism regarding rising demand in the US.

The US Energy Information Administration is set to release its official inventory report during the day. Also, the weakening of the US dollar against other currencies aided the rise in oil prices.

The US dollar index, which measures the US dollar’s value against other currencies, fell 0.15% to 106.809. The weak dollar is expected to enhance demand by making oil cheaper for those who use foreign currencies.

Brent has been trading flat after a sharp fall on Monday as the market assesses the Middle East’s new dynamics, ING says.  Israel and Hezbollah have announced a 60-day ceasefire agreement, effective immediately. This time window could be used to discuss a longer-lasting peace agreement.

The focus now shifts to the implementation of the current agreement and how it affects ongoing fighting in the Gaza Strip or the Israel-Iran conflict. OPEC+ is scheduled to meet this weekend and expectations are that the group could further delay its plans to increase production by 180k bbls/d in January.

In the last meeting, the group had postponed its supply increment plans from December to January. Crude oil prices continue to face stiff resistance around US$75/bbl due to demand concerns. Any premature production hike from the group could push the market into deeper oversupply

As PETROAN laments N75 price difference between “PH, Dangote” refineries

By Charles Ebi 

President Bola Tinubu has directed Nigerian National Petroleum Company ,NNPC, Limited to quickly reactivate the second unit of the Port Harcourt Refinery as well as the refineries in Warri and Kaduna.

This directive was given by the President via a statement issued on Tuesday by his Special Adviser of Information and Strategy, Mr Bayo Onanuga.

Mr Tinubu issued this order in reaction to the commencement of crude oil processing by the Port Harcourt refinery in Rivers State yesterday.

The facility began official loading of petroleum products, including the Premium Motor Spirit ,PMS, otherwise known as petrol, yesterday after gulping about $1.5 billion for rehabilitation.

This process started in 2021 under the administration of President Muhammadu Buhari, who his successor praised for “initiating the comprehensive rehabilitation of all our refineries”.

In the statement yesterday, the President noted that the reactivation of the remaining refineries would “significantly enhance domestic production capacity alongside the contributions of privately-owned refineries and make our country a major energy hub, with the gas sector also enjoying unprecedented attention by the administration”.

He affirmed his “administration’s determination to repair the nation’s refineries, aiming to eradicate the disheartening perception of Nigeria as a major crude oil producer that lacks the ability to refine its own resources for domestic consumption”. 

Highlighting the values of patience, integrity, and accountability in the rebuilding of the nation’s infrastructure, President Tinubu called upon individuals, institutions, and citizens entrusted with responsibilities to maintain focus and uphold trust in their service to the nation.

“In alignment with the Renewed Hope Agenda focused on shared economic prosperity for all, the President reaffirms his administration’s commitment to achieving energy sufficiency, enhancing energy security, and boosting export capacity for Nigeria”, the statement said.

Mr Tinubu used the opportunity to laud the NNPC under the leadership of Mr Mele Kyari for his “unwavering dedication and commitment” in overcoming challenges to achieve this milestone.

In a related development, the Petroleum Products Retail Outlets Owners Association of Nigeria ,PETROAN, has said the price of Premium Motor Spirit, also known as petrol, being sold by the old Port Harcourt Refinery, which resumed production on Tuesday, is N75 per litre higher than that sold by the Dangote Refinery.

This was revealed by the association’s Public Relations Officer, Mr Joseph Obele, during the official reopening ceremony of the refinery, which is now operating at a capacity of 60,000 barrels per day.

The lifting price of Dangote’s petrol product is N990 per litre. However, the refinery announced a N20 discount on Sunday, which is only available to marketers buying a minimum of 2 million litres of the fuel.

Mr Obele, a former chairman of the Independent Petroleum Marketers Association of Nigeria ,IPMAN, at the Port Harcourt Deport who initially applauded the federal government for revitalising the old refinery, expressed concern over the pricing disparity between petrol supplied by the Nigerian National Petroleum Company ,NNPC, Limited and the Dangote Refinery.

According to him, while Dangote Refinery sells petrol to marketers at N970 per litre, NNPCL’s price stands at N1,045, a difference of N75 per litre.

He said the N75 price differential is a steep margin for businesses, particularly for an industry where profitability hinges on competitive pricing.

However, Mr Obele described the refinery’s restoration as a significant step in reducing Nigeria’s dependence on imported petroleum products.

He revealed that the Group Chief Executive Officer of NNPC Limited, Mr Mele Kyari, has promised to address the issue and harmonise prices to mitigate the impact on marketers and consumers.

The reopening of the Port Harcourt Refinery is expected to enhance local production capacity and reduce reliance on imports, a move welcomed by stakeholders across the sector.

However, concerns over pricing disparities underscore the need for continuous reforms to stabilise the downstream sector of the petroleum industry.

The reopening has also sparked anticipation for the rehabilitation of other state-owned refineries including the second refinery in Port Harcourt as well as the Warri and Kaduna structures.

By Yahaya Umar 

Governor of the Central Bank of Nigeria CBN,  Mr Yemi Cardoso, has said the lender’s efforts to tame inflation and pressures on the foreign exchange market will begin to yield results by the first quarter of 2025.

Mr Cardoso spoke during a press conference in Abuja to announce the outcomes of the two-day meeting of the Monetary Policy Committee ,MPC, which raised the Monetary Policy Rate ,MPR, for the sixth time by 25 basis points to 27.50%.

He said the apex bank is using every possible strategy to tame inflation with a firm assurance that ongoing monetary tightening measures, which it has done six times alone this year, will have a favourable outcome.

The CBN rationalised that the 25 basis points hike is targeted at addressing rising inflation, which stood at 33.88% as of October 2024.

“The Central Bank is resolute and committed to continuing to fight the war against inflation and there is no going back on that.

“We are going to deploy everything in our arsenal to ensure that we are able to tame it. And of course, this entails the return to orthodox monetary policies,” Cardoso stated amid agitations of rising interest rates on the economy”,  the Central Banker said.

According to him, the Committee was unanimous in its decision to further tighten policy, though members took a decision to retain the asymmetric corridor around the MPR at +500/-100 basis points; Cash Reserve Ratio of Deposit Money Banks at 50% and Merchant Banks at 16%; as well as the Liquidity Ratio at 30%.

He also said the MPC was particularly concerned that all inflationary measures also inched up on a month-on-month basis, suggesting the persistence of price pressures, with attendant adverse impacts on the income and welfare of citizens.

Despite this, Mr Cardoso’s tone was optimistic, forecasting that current measures would be able to tame prices in coming months due to lag effect.

“It is important for people to understand that there is a time lag between when you implement policies and when they have an impact. That time lag can be anything up from six to nine months to even a year. Our own perspective is that we expect to see greater results in the first quarter of 2025″.

He said in addition, that the apex bank is working very assiduously with some of the relevant agencies to ensure that structural impediments to growth are handled appropriately.

“We are ensuring that we are on top of the game and that the foreign exchange market operates at its most optimal manner to reflect the true value of the currency, and of course, we have price discovery”.