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.

OPEC FLARES UP AS UNREST ERUPTS

Opec may have no appetite to cut oil production deeper when it meets next month, but flaring political crises across the group are once again threatening supply.Unrest erupted in Iraq and Iran this month – two of the Middle East’s biggest producers – as people took to the streets protesting financial...
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ARAMCO IPO SIGNALS THE END OF DAYS FOR OPEC

The end of days for OPEC is nigh, not only has it outlived its usefulness, it is no longer fit for purpose. In a global economy so vastlydifferent from the time the organisation was established the impending Aramco IPO provides a clear indication, if any were needed as to the direction...
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ROUHANI IRAN ACT TO SABOTARGE SAUDI ARAMCO IPO

Iran’s oil Minister Bijan Namdar Zanganeh told reporters in Tehran today that an oil field whose discovery President Hassan Rouhani announced over the weekend adds only 22.2 billion barrels to the country’s estimated crude reserves. Out of the amount at the site, only a tenth, 2.2 billion barrels can be extracted...
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NIGERIA OPEC CUT PRODUCTION TO BOOST SAUDI ARAMCO IPO

It has been reported that Nigeria has agreed to cut its  production of crude oil and condensates  in an effort to assist Saudi Arabia, the de facto leader of OPEC, with the Saudi Aramco's IPO. According to the Wall Street Journal Nigeria not only  agreed to the cut production and comply...
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SUPERMAJORS POST 42% SLUMP IN Q3 EARNINGS

A combination of tardy economic growth, a reduction in global oil demand, falling energy prices  and shrinking margins in the petchem market have seemingly conspired to plunge 3rd quarter earnings for supermajors. Five of the world’s largest publicly traded oil and gas companies, Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron...
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US SANCTIONS ON COSCO SPIKE FREIGHT RATES TO WS300 AS FAR EAST REFINING MARGINS COLLAPSE

Far East Refiners margins have been hit hard as freight rates soar. Spot VLCC freight rates for shipping crude from the Persian Gulf to the Far East breached the 200 Worldscale mark  with ship owners  earnings extending beyond  the $200,000/day figure for the first time in over a decade. The dearth...
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US ECONOMIC DATA INCREASES BEARISH OUTLOOK

IS THE US ECONOMY TRENDING TOWARDS RECESSION   Oil fell as concerns about the U.S. economy triggered another sharp selloff on Wall Street, with the S&P 500 off 1.7%, falling below 2,900. Crude oil benchmarks fell n morning trading Wednesday on the NYMEX on a larger than forecast build in crude...
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US TROOPS TO DEFEND SAUDI SPECIAL RELATIONSHIP

Oil prices have retreated back to the pre- strike levels as Aramco reports it has  restored full production capacity. Their  prompt actio has  made markets reluctant to demand much, if any, oil price risk premiums, as if we are to believe what we are told, the Saudi's have the ability to...
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HOUTHI DRONES TEST MARKET MISPRICED RISK PREMIUMS ON SAUDI PRODUCTION

President Trump said Wednesday he will tighten the economic screws on Iran, as the U.S. and Saudi Arabia begin to coordinate a response to the drone strikes on the kingdom’s oil processing facilities. US intelligence has put Iran firmly in the frame, though beyond the wreckage of crashed drones , currently...
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