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Brent slides to $40.19, as Oil extends losses

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Oil jumps above $41 as storm hits U.S. output, inventories drop

…Following Coronavirus spike which shatters demand hopes***

Oil prices slid for a second straight session on Monday as coronavirus cases rose in the United States and other places, leading some countries to resume partial lockdowns that could hurt fuel demand.

Brent crude dropped 83 cents, or two per cent, to $40.19 a barrel by 0456 GMT, while U.S. crude was at $37.69, down 80 cents, or 2.1 per cent.

Brent crude is set to end June with a third consecutive monthly gain after major global producers extended an unprecedented 9.7 million barrels per day supply cut agreement into July, while oil demand improved after countries across the globe eased lockdown measures.

However, global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily.

Also read:  $42.81: Oil prices rise on OPEC+ cuts, record China imports

New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.

“The second wave contagion is alive and well,’’ Howie Lee, an economist at Singapore’s OCBC bank, said.

“That is capping the bullish sentiment that we’ve seen in the last six to eight weeks.’’

Other factors restricting oil prices’ advance at this stage include poor refining margins, high oil inventories and the resumption of the U.S. production, Lee said.

Despite efforts by OPEC+ – the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia – to reduce supplies, crude inventories in the U.S., the world’s largest oil producer and consumer, have hit all-time highs.

“There is also a risk that gains in prices recently could see some U.S. shale producers, restart wells,’’ ANZ analysts said.

Even as the number of operating oil and natural gas rigs dropped to a record low last week, higher oil prices are prompting some producers to resume drilling.

“In the next one-two weeks, we should see an uptick in rig count commensurate with the pick-up in oil production,’’ OCBC’s Lee said.

Elsewhere, U.S. shale oil pioneer, Chesapeake Energy Corp, filed for bankruptcy protection on Sunday as it bowed to heavy debts and the impact of coronavirus outbreak on energy markets.

The Brent crude price is supported at $39.80 a barrel while WTI’s support level is at $37, OANDA Senior Market Analyst, Jeffrey Halley, said, referring to technical charts.

“A daily close below these points will signal that a much deeper correction is upon oil markets,’’ he said.

Halley added that a deteriorating COVID-19 picture in the U.S. would be the most likely driver of lower prices.

 

Reuters

 

Economy

ILLEGAL EXPORT: Nigeria Signed Asset Agreement With Jersey For Return Of £2.1m- Fagbemi

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ILLEGAL EXPORT: Nigeria Signed Asset Agreement With Jersey For Return Of £2.1m- Fagbemi

…Secures £20 Million interim costs award, against P&ID

The Federal Government of Nigeria has signed an Asset Sharing Agreement with the Bailiwick of Jersey for the return of 2.1 million pounds proceeds of corruption.

The Attorney-General of the Federation (AGF), Lateef Fagbemi SAN, made this known while presenting the scorecard of his ministry as part of the activities to mark the first anniversary of President Bola Tinubu’s administration.

The minister said that  the signing of the agreement in February this year was in line with the cardinal principle of the present administration in the fight against corruption,

He said President Tinubu has already approved the use of money for the continuation of works on the Abuja-Kano Road project.

Fagbemi said that an efficient justice delivery system is key to ensuring Nigeria’s economic growth and development, as well as ensuring the socio-economic well-being of citizens.

“Effective justice system is measured not only by the numbers of cases which are successfully disposed of but also and more importantly, the strategic measures adopted to avoid litigation.

“Using a combination of effective defence strategies to cases, arbitration, mediation and diligent prosecution of appeal cases, the ministry succeeded in saving the country from huge debt liabilities.

“In the reporting period, a total of 625 cases instituted against the President, Federal Government and its agencies, before States, Federal and ECOWAS Court were served and responded to by the ministry.

“The ministry also received and treated 593 requests for legal advice and petitions from May 2023 till date and in all, we obtained 235 judgments’’.

He noted that the administration had witnessed a landmark decision in an arbitration instituted against Nigeria by Process and Industrial Development Limited (P&ID).

“In that case, a UK commercial court set aside an arbitral award of over 11 billion dollars granted against Nigeria in the United Kingdom for breach of a gas supply and processing agreement.

“So, I am pleased to report that due to concerted efforts of our legal team, Nigeria has been awarded interim costs in the sum of £20 Million against P&ID’’.

Fagbemi noted that the case was a useful lesson that had been learnt as the case had the potential of wiping off the nation’s entire foreign reserves.

He said the issue had led to the development of a Federal Contracts Administration System.

“As noted by the English Court, the genesis of the case is traceable to a flawed contractual agreement that was tainted with fraud’’.

He said that in line with the cardinal principle of the present administration in the fight against corruption, the ministry has achieved success in its International Asset Recovery and Management efforts.

“For the Glencore Settlement, we have concluded negotiation of a Settlement Agreement with Glencore International A.G. wherein Glencore is expected to pay the sum of 50 million dollars as penalty and compensation for certain activities in Nigeria’’.

He noted that the ministry has equally done well in facilitating international cooperation on terrorism financing and other transnational crimes.

“We have gotten 13 convictions in terrorism financing cases and have also successfully concluded 150 mutual legal assistance requests and 12 extradition requests from Law Enforcement Agencies and foreign countries.

“We secured 160 convictions for criminal offences, 87 convictions for terrorism cases, and 3 novel convictions for extremist terrorism actors involved in the radicalisation of children and violence against women. 

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FG Begins Construction On Lagos-Calabar Coastal Highway Sections 3, 4 –Umahi

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FG Begins Construction On Lagos-Calabar Coastal Highway Sections 3, 4 –Umahi

…Sokoto to Badagry 1,000 km stretch also receives approval

The Federal Government has announced the immediate flag-off of construction work on sections three and four of the Lagos-Calabar Coastal Highway project, beginning from Calabar.

The Minister of Works, Sen. Dave Umahi, announced an engagement with representatives of communities within the alignment of the road between Eko Atlantic (Chainage Zero) and Eleko inside (Chainage 47.4klm, on Thursday in Lagos.

He said that section three would start from Calabar and section four from Akwa Ibom.

Umahi said, “Let me announce also that Mr President has directed that section three, starting from Calabar and section four is starting from Akwa Ibom should commence immediately; and so, we are in the process of concluding the procurement.

“And for those who have been saying why not start these roads in Calabar, one, the zero point is Lagos and what wrong has Lagos done to these people?

“However, an impartial President of the Federal Republic of Nigeria, Sen. Bola Tinubu, has directed that sections three and four be started from the end of the project. So while this is moving, the other one will be moving.

“I’m sure that sections five and six will also start in places like Port Harcourt and Bayelsa.”

Umahi also announced that the president had approved the commencement of construction work on the road connecting Sokoto to Badagry.

He said: ” Just the last Federal Executive Committee meeting on Monday, Mr President also approved another project; because this road has two spurs, we start the design and procurement of that Sokoto to Badagry.

” It’s a 1,000 km, it’s running through a lot of irrigation, lands and dams where you can have a lot of power generation and its running from Sokoto to Kebbi, Kebbi to Niger, Niger to Kwara, Kwara to Oyo, Oyo to Ogun state, and then to Badagry in Lagos State.”

The minister, who acknowledged potential criticism about the project’s scale and chosen sections, mentioned that section one, 47.7 kilometres, was ambitious for an interstate road project.

He said that the federal government planned to recoup construction costs through tolling and selling land along the road corridors.

The aim, according to him, is to create a scenic route similar to coastal highways in other countries.

Additionally, he said that the return on investment would start immediately after the first section was completed and would come from tolls and land sales along the completed section one.

The minister pointed out that the country loses money daily due to cargo transhipment at Apapa Port.

He explained that Apapa Port’s water depth was insufficient for large ships, forcing them to use deeper ports elsewhere for cargo transfer (transhipment), which incurred millions of dollars on daily basis.

He said that the new roads would act as an evacuation corridor for the Lekki Deep Sea Port to other parts of the country.

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Economy

Hope Rising: Naira Gains N3.31 Against Dollar At Official Market

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Naira Gains N61.38 Against Dollar At Official Market

…Trades at N1,465.68 to dollar

 The Naira gained N3.31 at the official market on Tuesday, trading at N1,465.68 to the dollar.

Data from the FMDQ Exchange, which oversees the Nigerian Autonomous Foreign Exchange Market (NAFEM), revealed a 0.22 percent appreciation for the Naira compared to Monday’s rate of N1,468.99 to the dollar.

The volume of currency traded also increased, with the total daily turnover rising to 268.17 million dollars on Tuesday from 161.41 million dollars on Monday.

At the Investor’s and Exporter’s (I&E) window, the Naira traded between N1,549.00 and N1,401.00 against the dollar.

The Association of Bureau De Change Operators of Nigeria (ABCON) commended the CBN’s reforms for the Naira’s appreciation at the official market.

Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON)

ABCON President, Dr Aminu Gwadabe, urged the CBN to sustain policies benefiting the local currency.

Gwadabe cited multifaceted efforts through fiscal and monetary policies, alongside security agency interventions, as key to the Naira’s recovery.

“Volatility is like runoff water; if not directed, it will direct itself. I am happy to see multiple agencies coming together to confront these challenges,” he said.

Gwadabe called for technological upgrades and collaboration among operators, regulators, the government, and security agencies.

This, he noted, was to improve control over the foreign exchange market and to establish a bylaw to mitigate volatility. 

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