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 NIGERIA NGIGE UNDEREMPLOYED OR UNEMPLOYABLE?

NIGERIA NGIGE UNDEREMPLOYED OR UNEMPLOYABLE?

08 May 2019

Working on the assumption that the Minister of Labour and Employment, Senator Chris Ngige has not been misquoted it is difficult to understand his recent pronouncement and what now seems...

NIGERIA ANOTHER MOU ANOTHER DAY

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01 May 2019

Nigeria has announced ambitious plans to double its oil production by 2025, targetting 4 million bpd in six years’ . Maikanti Baru, Group Managing Director at the Nigerian National Petroleum...

NNPC REFINERY WOES 2019

NNPC REFINERY WOES 2019

24 April 2019

The Nigerian Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has not unpredictably, stated that Nigeria’s continuous subsidy of petrol consumption means the Nigerian National Petroleum Corporation (NNPC) will...

NIGERIA OPEC STAND FIRM

NIGERIA OPEC STAND FIRM

28 March 2019

Nigeria and other member countries of the Organisation of Petroleum Exporting Countries (OPEC) as well as their non-OPEC allies led by the Russian Federation have said they are committed to...

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18 March 2019

PALM OIL PRODUCTION A MEAGRE PERFORMANCE Nigeria from gaining a substantial share of the global oil palm industry now worth $62 billion annually, casting doubts on government’s ability to grow...

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NIGERIA REFINING THE VISION

18 March 2019

NIGERIA REFINING THE VISION Nigeria is the only OPEC member country that imports gasoline (PMS) and holds the dubious distinction of being the largest importer in the world. The Nigerian...

IS THE PGB FATALLY FLAWED?

IS THE PGB FATALLY FLAWED?

18 March 2019

IS THE PIGB FATALLY FLAWED? Ten years after the Petroleum Industry Bill began its tortuous odyssey which has included the Bill being broken into four portions, both houses of the...

CBN PUMP UP THE T-BILLS

CBN PUMP UP THE T-BILLS

18 March 2019

CBN PUMP UP THE T-BILLS The Central Bank of Nigeria (CBN) plans to raise a total of N1.809 trillion from the debt market, in the first quarter of 2019.This is...

TIN EXPORTS NIGERIA

TIN EXPORTS NIGERIA

17 March 2019

TIN EXPORT NIGERIA Synterra are able to export high grade tin ore from Nigeria. We agregate the Mining production of a number of artisanal miners and consolidate volumes for exportSynterra...

BERYLLIUM MINING OPPORTUNITIES

BERYLLIUM MINING OPPORTUNITIES

17 March 2019

The Nigeria Solid Mineral and Mining Sector has in effect made the great leap forward which will now allow investors to take advantage of the vast mineral potential Nigeria possess....

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Monday, 18 March 2019 00:06

IS OIL POISED FOR A BREAKOUT?

Written by Femi Ogunkolati

IS OIL POISED FOR A BREAKOUT?

 

Against the backdrop of US-China trade negotiations both WTI and Brent saw the highest price finish for a front-month contract since Nov. 19, according to Dow Jones Market Data. Week to date, WTI prices were 5.4% higher, while Brent jumped by 6.7%. Brent crude on Friday topped $66 a barrel for the first time this year, hitting a roughly three-month closing high at $66.25 and rising 6.7 percent this week. Meanwhile, U.S. West Texas Intermediate crude approached $56 on Friday, settling 2.2 percent higher at $55.59 a barrel, the best closing prices since Nov. 19.  OPEC earlier in the week reported its crude output had fallen by nearly 800,000 barrels a day in January to average 30.81 million barrels a day, with most of the cuts coming from Saudi Arabia. The International Energy Agency’s monthly oil market report, also released this week, reported the Saudis had cut production by 400,000 barrels a day last month, to average 10.24 million barrels a day. Saudi Arabia, pledged earlier this week to cut output further in the coming months, citing oil minister Khalid al-Falih, who said the country would cut an additional 500,000 barrels a day to take production to 9.8 million barrels a day in March.

 Energy Intelligence reported Thursday, citing sources familiar with the matter, that Saudi Aramco halted oil output this week at Safaniyah, the world’s largest offshore oil field, according to a tweet from Amena Bakr, senior correspondent at the news and research service provider. The oil field has capacity to produce more than 1 million barrels of oil a day. With or without a field outage,Saudi Arabia has once again asserted its gravitas in helping oil prices recoup some of the losses suffered since late last year. It has been reducing its production by more barrels than it was obliged to, leading an almost 800,000-bpd OPEC-wide production decline last month.

 

According to production data disclosed by the Ministry of Petroleum Resources .Nigeria produced 83k barrels per day less in January that in December 2018. The Ministry reported production level in December at 2,081,936 bpd, reduced by 82,644 bpd to 1,999,292 bpd in January. NNPC disclosed oil production in the month was curtailed by shutdown of Bonny export terminal and Trans Ramos Pipeline (TRP) due to leakages at the Patrick waterside and Odimodi areas. Production was also disrupted at Agbami; Brass; Okpo; Qua Iboe, OYO, Tulia and ERHA terminals due to flooding, technical issues, maintenance and leakages.

 

Under the recently agreed OPEC production cuts Nigeria is required to curb production by 53,000bd. This cut has not been extended to condensates and comes at a time when Nigeria’s ultra-deepwater oil field Egina is expected to produce 200,000 bpd . However condensates seem to provide Nigeria with an avenue to circumvent the OPEC production cuts. There is almost global uncertainity as to the amount of well head condensate Nigeria produces or even a universally accepted definition with Nigerian production estimates of up to 500,000 bpd.

 

It seems a little too early to determine whether the current rally means oil is poised for a break out. The catalyst is clearly Saudi's pledge to pump well below the agreed production cuts which is pushing oil prices through resistance built on prediction of demand destruction brought about by the unresolved US-China trade dispute. Most Commentators are agreed that further production cuts such as those anticipated with Venezuala and Iran as a consequence of US imposed sanction will provide further support for such a break out.

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