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Crude Oil Price Crash May Push Petrol Below N400/Litre – Refiners

by Folarin Kehinde
written by Folarin Kehinde

Crude Oil Refinery Owners Association of Nigeria has said that the price of Premium Motor Spirit (petrol) can drop below N400 per litre with the current crash in crude oil prices.

CORAN argued that there is no reason petrol should not be sold at NN350 per litre if crude prices eventually fall to $50 per barrel.

However, CORAN said petrol prices will continue to rise despite the crash in crude prices and the reduction in its landing cost.

CORAN feared that unless the Federal Government continues the naira-for-crude deal, the price of petrol will be on the rise even if the price of crude oil falls to $50 per barrel.

The PUNCH reports that oil prices plunged last week to $65 per barrel as the United States import tariffs and an unexpected OPEC+ supply hike erased $10 per barrel from global benchmarks.

The price had appreciated earlier when US President Donald Trump imposed tariffs on any country that buys crude from Venezuela.

However, oil prices turned the corner as of Friday, with Brent falling to $65, the first time since 2021.

According to oilprice.com, the combined effect of Trump’s import tariffs, OPEC+’s inopportune decision to speed up the unwinding of production cuts, and China’s retaliatory actions wiped off $10 per barrel from global oil prices, “with ICE Brent falling below $65 per barrel for the first time since August 2021.”

The US West Texas Intermediate crude futures lost $4.96, or 7.4 per cent to end at $61.99.

China’s retaliatory tariffs on US goods were said to have escalated a trade war that has led investors to price in a higher probability of recession.

China, the world’s top oil importer, announced it will impose additional tariffs of 34 per cent on all US goods from April 10.

According to Reuters, nations around the world have readied retaliation after Trump raised tariffs to their highest in more than a century.

Aside from the tariffs, another factor that further pressured oil prices was the Organisation of the Petroleum Exporting Countries and Allies’ decision to advance plans for output increases.

The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd.

In a bulletin released by the Major Energies Marketers Association of Nigeria, it was disclosed that the landing cost of petrol has dropped from N885 the week before to N865 as of Saturday.

However, despite the landing cost reduction, the ex-depot price of petrol rose from N860 to N900 per litre in Lagos, signalling the failure of the Nigerian market to react positively to the market forces.

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Dangote
Business

BREAKING: Dangote Refinery announces suspension of petrol sale in naira

by Folarin Kehinde
written by Folarin Kehinde

Dangote Petroleum Refinery has announced suspension of sale of petroleum products in naira.

This was announced in a notice sent to petroleum marketers, on Wednesday afternoon.

In the notice obtained by Daily Trust, the company said the decision is temporary, explaining why it took the decision.

“We wish to inform you that, Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.”

“To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency. Our attention has also been drawn to reports on the internet claiming that we are stopping loading due to an incident of ticketing fraud. This is malicious falsehood. Our systems are robust and we have had no fraud issues.

“We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira. We appreciate your understanding and cooperation during this period.”

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Nigeria's NNPC spent $10 billion on fuel subsidy in 2022 paid to WHO Leading reporters
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NNPCL Announces Launch of New Utapate Crude Oil Blend, Targets 50,000bpd

by Leading Reporters
written by Leading Reporters

NNPC has launched a new crude oil blend with a current production of 28,000 barrels per day, aiming for 50,000.

The Nigerian National Petroleum Company Limited (NNPCL) on Monday announced the introduction of Utapate crude oil blend, a new crude grade into the international oil market.

The new blend is from Oil Mining Lease (OML) 13 and is fully operated by NNPC Exploration and Production (NEPL), the national oil company’s upstream subsidiary.

A statement by the Chief Corporate Communications Officer of the NNPC, Olufemi Soneye, said that the Utapate crude oil blend commenced operations in July 2024, with its first cargo headed for Spain.

Located offshore Akwa Ibom State in Nigeria, Utapate’s current crude oil production is at 28,000 barrels per day, the NNPC said, with potential to increase it to 50,000 barrels per day.

In addition, the national oil company stated that the sulphur content of the new crude is 0.0655 per cent.

According to the NNPC, Spanish oil giant Repsol, won the tender for the initial cargo of the new crude blend which is comparable to the much sought after Amenam crude.

Besides, it noted that Gulf Transport and Trading, another leading crude oil dealer, had also secured the cargoes’ tenders for August and September 2024.

During the Argus European Crude Conference in London last year, NNPC  announcedthe launch of Nembe crude oil, produced by the NNPC/Aiteo operated OML 29 Joint Venture (JV).

“Similar to the Nembe crude oil grade, the Utapate crude oil blend has a low sulphur content and low carbon footprint due to flare gas elimination, fitting perfectly into the required spec of major buyers in Europe.

“This remarkable achievement signals the commitment of the NNPC to increase Nigeria’s crude oil production and grow reserves through the development of new assets,” the statement added.

Although there are three key crude oil blends, namely: West Texas Intermediate (WTI), Brent Crude and UAE Dubai Crude, there are tens of other little known grades.

Typically, crude oil is grouped according to its chemical properties, that is mainly  byits density and sulphur content. Crude is said to be sweet when it has a sulphur content of less than 0.5 per cent and sour if it’s higher than 1.0 percent.

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BusinessHeadlines

Crude Oil Rises Above $110 Per Barrel

by Folarin Kehinde
written by Folarin Kehinde

The price of crude oil skyrocketed at the weekend as the market generally ignored the crude oil demand implications from worries about the technical recession.

WTI crude traded near $100 at $99.94 per barrel, an increase of $3.52 (+3.65per cent) on the day. Brent crude was traded above $110 per barrel at $110.20, up $3.06 (+2.86 per cent) on the day.

The market cannot seem to brush off the tight supply situation that exists. Another bullish factor for crude oil on Friday was the Energy Information Administration’s publication of its numbers for U.S. crude oil production for May, which showed that U. S. crude oil production actually fell in May instead of rose, contrary to the EIA’s latest estimates from its Short Term Energy Outlook.

The news that OPEC+’s meeting next week would likely end with no significant production target increase also bolstered prices to a significant degree.

On Thursday, five OPEC+ sources suggested that OPEC+ was likely to keep its production targets for September steady with August levels. Two OPEC+ sources said that the group could discuss a small output hike. The market is aware, however, that even a hike in production targets is unlikely to result in an actual OPEC+ production boost due to chronic underproduction compared to the group’s targets.

WTI prices are not only up on the day but also up on the week. Prices have come down over the past month, however. WTI traded at nearly $110 per barrel this time last month. Prices are up more than $20 per barrel so far this year.

Despite the high price of crude oil and the recession, global oil demand doesn’t seem to be declining, Amrita Sen, director of research at Energy Aspects, told Bloomberg on Friday.

With indications that crude demand hasn’t yet fully recovered from its COVID-19 days, inventories are tight, even with millions of barrels of crude oil leaving Strategic Petroleum Reserves around the globe. When this flow of crude stops flowing from the SPR in October, the market could get even tighter.

Source: NigeriaDispatch

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PIB: PENGASSAN charges FG on Investors Oriented and Balanced Bill

by Leading Reporters
written by Leading Reporters

Kenny Folarin, Abuja

The National President, Petroleum and Natural Gas Senior Association of Nigeria (PENGASSAN), Comrade Festus Osifo has charged the federal government to ensure an investor oriented and balanced Petroleum Industry Bill (PIB) when passed into law.

Osifo while speaking in Abuja on Friday at the 6th Triennal Branch Delegates Conference noted that government should include the investors’ interest in the bill which will not just make the bill balanced but will ensure reserve development and national production increase.

“What we are advocating is that as long as government want to make more money, government at the end of the day should also look at the investors so that it will be balanced, so that this investors will not run away to other countries that have crude oil, so it must be a balanced bill that was our advocacy which will encourage them to stay”.

“We have about 37 billion barrel reserve of crude oil, now if we have investors that put in money into it, they will continuously develop this reserves and our national production will increase.

Osifo explained that if investors are disincentivised, there will be low patronage and they will go to neighboring countries where crude oil is available

“If you disincentives investors, they will run to neighboring countries that is why we want a balanced bill and again we want the investors to also make money so that at the end of the day, our members will be better of for it, the welfare of our members is paramount”.

Speaking on the theme: Energy Transition and implication on PENGASSAN, Osifo stated that the world largely depends on fossil fuel which depict a gradual transmission to fossil fuel and as such, PENGASSAN must be prepared and begin to explore other energy dependable areas in order to maintain relevance in the oil and gas industry.

“We must be prepared as PENGASSAN and as an association to be ready so that when that time comes we will not be taken unaware, so what that means is that PENGASSAN as an institution should begin to look at how do we expand our tentacles to solar energy, the electricity industry and others, those are what we should be discussing today, so that in years to come, PENGASSAN will still be relevant in the scheme of things in the industry”.

Branch Chairman, Total E&P Nigeria PENGASSAN, Victor Ibeawuchi encouraged the management team of TOTAL E&P Nigeria to continue to foster the spirit of mutual respect, co-operation and collaboration with the Association as collaboration is legendary in the industry and has become a standard to be met by their peers.

“The industry needs more collaboration for all to progress and that include deeper Union Management engagement and co-operation”.

Ibeawuchi added that the industry is turning a corner to new grounds and changes surely are expected within the entire industry, both locally and globally and as such, it is imperative for the Association to steer itself from business-as-usual, re-create and re-invent its methodologies and action-templates towards maintaining its relevance and positivity to ensure that it continues to add value and contribute to the sustainability of our farmland in the best interest of members, families, the association and the industry.

“All eyes are set on the impact of the much-awaited Petroleum Industry Bill and therefore uncertainties abound, nevertheless, we can always achieve our objective through teamwork”.

“This speech is a direct appeal that both Management and the Unions must continue to collaborate to ensure the continuity of improved welfare for the staff and the sustainability of the Company”. He added.

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