NIGERIA: THE CRUDE OIL ECONOMY

Synterra the Nigeria Risk Management Consultants provide insight into how the oil markets affect the Nigerian economy. Nigeria's reliance on crude oil receipts is total. At a time of increasing volatility and uncertainty this blog seeks to provide an analysis of the effect the global energy markets have on business in Nigeria, their relationship with OPEC and how local policy decision making affects investment opportunities.

NNPC FAIL NIGERIA AGAIN,TIME TO HEDGE OIL

There is reason for Nigerians to worry and it is not only the arrival of COVID-19. Oil price benchmarks are in freefall, crashing through resistance levels as if they were none existent. This week has seen Oil fall to its lowest price levels since July 2017 and barring  a miraculous cure...
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OIL PRICES SLUMP AS MARKET LOOKS TO OPEC

Oil price benchmarks suffered further deterioration as the COVID-19 instigated assault weighed heavily on global markets. Oil prices slumped yet again on Thursday,  for the fifth straight day  to their lowest since January 2019. The coronavirus epidemic's  sporadic global outbreak has  intensified  fears of a pandemic that will lead to a...
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NIGERIAS APRIL CRUDE PROGRAM EMERGES

COVID-19 and the consequent demand destruction is set to affect Nigerian crude as there is simply far too much oil in the market. This is making it difficult to shift cargoes and exerting downward pressure on price differentials. The falling crude price has already caused the IMF to revise downward Nigeria GDP growth. The last time oil prices collapsed it sent the country in to recession in 2014, the economy is only just emerging from that recession.

 

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CRUDE OIL IMPORTS CREATE CHINESE PUZZLE

COVID19 THE CHINESE PUZZLE It is by definition complex, intricate, requires ingenuity and is perplexing. Out of a clear blue sky just as market analysts had snugly settled down with their forecast outlook for 2020, it  emerged without warning, a shock that  the market is still yet to fully comprehend. Despite...
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PUTIN TAKES CONTROL OF OPEC

Russia seem to have won the argument and OPEC+ will meet as scheduled in Vienna on March 5th- 6th. It could be that a resurgence  in the  Brent oil price benchmark which has seen it reach  $59.16/b as of 1719 GMT today, up 11% from the February 10th  low has alleviated...
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COVID-19 SUPPORTS REFINERY MARGINS

A slower decline in refined product prices compared to crude oil saw refinery margins strengthen. Though Chinese refining margins stayed firmly in negative territory, with Arab Medium cracking margins averaging minus $1.84/b, up from the minus $3.98/b the week earlier.The decline in the demand for transport fuel created by COVID-19 saw...
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ROYAL DUTCH SHELL SHELF BUY BACK

ROYAL DUTCH SHELL SHELF OIL BUY BACK It has emerged that in the wake of the coronavirus Royal Dutch Shell , the world’s second-largest listed oil and gas companyhas now decided to slow down the rate of its planned share buy back. Shell embarked on a $25 billion buy back programme...
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WHO ANNOUNCEMENT TIPS OIL MARKET BEARISH

NOBODY SAW THIS ONE After a couple weeks of continued slippage, the price of the Brent and WTI benchmarks were trading down 0.98% and 0.73% on the day, respectively, at 9:51 am as the World Health Organization declared a global health emergency. While the WHO did not recommend any travel restrictions...
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SAUDIS PROMPT OPEC TO THE RESCUE

Saudi Arabia has opened a discussion about moving the upcoming OPEC+ policy meeting to early February from March, four OPEC+ sources said, after a swift slide in oil prices alarmed Riyadh. Worries over the economic impact of China’s coronavirus has rattled global markets, helping send the price of crude down to...
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