Stephen Brennock of oil broker PVM.Oil said that oil rose to around $73 a barrel as at 6th September 2021 because of the growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost. About three quarters of the U.S. Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August which is roughly equal to what Nigeria produces.
Jeffrey Halley who is an analyst at brokerage OANDA “The Biden-Xi phone call has had the same effect on oil markets as it has on other asset classes,” said. On 2nd of September 2021, both crude contracts had fallen more than 1 per cent, after China said it would release crude oil reserves via public auction to help ease high feedstock costs for refiners, a move described as a first. In focus next week will be revisions to the oil demand outlook for 2022 from the Organization of Petroleum Exporting Countries, OPEC and the International Energy Agency. OPEC will likely revise down its forecast on Monday 20th September 2021.
In other news, the new chairman of the Major Oil Marketers Association of Nigeria, MOMAN, Mr Olumide Adeosun has called for accelerated implementation of the Petroleum Industry Act (PIA) with regard to liberalization of the downstream sector. Adeosun, who is the Chief Executive Officer, Ardova Plc, on 9th September 2021 assumed leadership of the Association revealing that the body has made strong recommendations to the PIA implementation committee with regard to how the industry should be made to attract investment and help in sustaining the national economy. He stated that “I consider myself extremely fortunate to have the opportunity to serve as Chairman of MOMAN at such an exciting time in our industry. As a group, we are on the verge of new beginnings for the downstream sector, and I believe our path will be intriguing as we move toward a less price-controlled reality.” According to him, Oyebanji’s term spearheaded MOMAN’s contacts with the Petroleum Products Pricing and Regulatory Agency on a variety of problems, including the PIB, Petroleum Support Fund outstanding subsidy discourse, and margin adjustment.
Also, The Nigerian National Petroleum Corporation (NNPC) has foreclosed immediate plans to suspend the fuel subsidy regime.
Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, stated this during his presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) at the National Assembly in Abuja on Wednesday 8th of September 2021. There is an ongoing process that is engaging members of the organized labor, civil society organizations and many other institutions of Government and other critical stakeholders to arrive at a landing on how and when we can exit the subsidy regime to be very precise.
He said the Government is not sure that it can conclude the process of exiting the subsidy regime before the end of 2021 or early 2022, hence the provision of fuel subsidy in the 2022 Appropriation.
These 3 developments in the oil and gas industry contradicts itself hereby creating an open season for price instability for Petroleum Products (AGO/MGO/PMS) as the Major marketers and NNPC differ on the way forward as regards to downstream policies.
Source: Oriental News, Guardian News, All Africa.
