Oil prices hit $50/barrel, first time since March – Newstrends
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Oil prices hit $50/barrel, first time since March

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Brent Crude price rose to $50.16/barrel at the close of trading on Thursday, showing a gain of over two per cent, while the WTI futures traded at $46.87/barrel.

The $50/barrel mark is the highest price area since March amid positive macros coming from COVID-19 vaccines.

Indeed, Brent crude traded at $50.34/Barrel and the US oil-based contract, West Texas Intermediate futures traded at $46.96/barrel.

This is good news to Nigeria and other oil producing nations (OPEC) whose economies run largely on oil revenue.

Meanwhile, after a week of contentious OPEC+ discussions, in which the UAE played a key role, it appears that the Abu Dhabi National Oil Company (ADNOC) is now aggressively pursuing market share.

The UAE was very vocal during the OPEC+ meeting about its resentment of having to carry the burden of COVID-19 demand destruction and the global energy transition. Abu Dhabi’s Crown Prince Mohammed bin Zayed and ADNOC’s CEO Sultan Ahmed Al Jaber have now clearly decided that it is time to reap the rewards of their large-scale oil and gas investments.

This announcement made by ADNOC that it has awarded US oil company Occidental an oil and gas exploration concession in its second competitive bidding round is a clear sign that the OPEC member is determined to increase production capacity to 5 million bpd by 2030.

Occidental will own 100% of the concession during the exploration phase and will be required to invest around $140 million to explore the 4,212 square kilometer project. This is the second concession given to Occidental by ADNOC. In February 2019, Occidental won Onshore Block 3 in Abu Dhabi’s first competitive bid-round.

According to the agreement, ADNOC will be able to own up to 65% of the concessions during their 35-year production phase. If successful, the ADNOC-Occidental joint venture could provide a much-needed boost to the nation’s oil output. Despite a brutal year for oil markets, ADNOC wants to increase its production capacity by 25% by 2030.

The ADNOC-Occidental news followed last week’s Abu Dhabi Supreme Petroleum Council’s announcement that recoverable unconventional oil reserves have increased by 22 billion barrels, and conventional reserves by two billion. It is expected that several other concession agreements for the 2nd bid round will be soon announced.

It is unclear which companies are favorites to win these concessions, but some Russian companies are expected to do well.

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CBN gives new directive on dormant accounts, unclaimed bank balances

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CBN gives new directive on dormant accounts, unclaimed bank balances

The Central Bank of Nigeria (CBN) has released updated guidelines for managing dormant accounts, unclaimed balances, and other financial assets in banks and other financial institutions across Nigeria.

Under the new directives released on Friday, financial institutions must transfer accounts that have been inactive for over a decade to the CBN’s custody.

The CBN’s guidelines aim to standardize the handling of dormant accounts, unclaimed balances, and financial assets. They detail the procedures banks and financial institutions must follow to manage these funds and assets.

The bank will later provide details on how to transfer the relevant balances, funds, and assets to the CBN. It will also supply updated templates for submitting quarterly returns to the Banking Supervision Department or the Other Financial Institutions Supervision Department, as appropriate.

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Effective immediately, these guidelines replace a previous circular from October 2015.

The CBN noted that financial institutions often hold deposit accounts and other liabilities that see no customer activity for extended periods, rendering them dormant. Maintaining such accounts can lead to significant unclaimed balances, which may not benefit the depositors.

Furthermore, the CBN warned that dormant and unclaimed balances are increasingly vulnerable to fraud and misuse.

The revised regulation aims to prevent the misuse of dormant and inactive accounts, establish operational standards, and enhance the CBN’s oversight of these accounts. It also seeks to identify dormant accounts and unclaimed balances, reunite them with their rightful owners, hold the funds in trust, and provide a standardized procedure for reclaiming these funds.

Eligible accounts include those that have been dormant for 10 years or more.

CBN gives new directive on dormant accounts, unclaimed bank balances

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Nigerians lament high cost of yam, 100 tubers sell for N1m in Karuna

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Nigerians lament high cost of yam, 100 tubers sell for N1m in Karuna

Both the sellers and buyers alike are confused at the Bakin Dogo food market in Kaduna North Local Government Area, Kaduna State, as 100 tubers of old yam go for N1 million at wholesale.

Meanwhile, the same number of new yams cost between 350,000 and 400,000 in the same market.

One of the retailers in the market identified as Alhaji Abubakar, lamented his inability to recoup his capital let alone make any profit from the last 100 tubers he bought.

According to him, “Honestly we are in big trouble. I have never experienced this type of market for decades. We are suffering too much this time around.

“One Koriya (100 pieces) of big old yam is N1 million. More than half of the last ones I bought are still here because people are not ready to buy one yam for more than N9,000.

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“Imagine selling one yam for N10,000. Those who buy one or two are our regular customers who have built trust in us over a period of time. Others are pricing it anyhow”, he said.

To Muhammed, “the new yam is already here, and that poses a big threat to those of us who still have old yams for sale. “For example, I sell one new yam for between N4,000 and N4,500. That is equivalent to the old ones while we sell10 pieces of new yam (medium) for 14,500.”

They both attributed the scarcity of yams to the inability of a lot of yam dealers to go to remote villages due to escalating insecurity in the country. The available are also being mopped up for inward transportation to neighbouring countries like Niger and Ghana.

One of the prospective buyers who spoke in confidence said: “I have to change my mind. The last time I came here, I bought the same size N3, 000. “Today they are asking me to pay N9,000 for just one old yam and N4,000 for a new yam. But, I don’t want to buy the new yam yet because it can easily spoil.

“Meanwhile one tier of garri is N1, 400. So, why do I have to spend my scarce money just to buy just one yam that we will just boil and eat once?”

Nigerians lament high cost of yam, 100 tubers sell for N1m in Karuna

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Nigeria’s external reserves climb to $36.89bn, says CBN gov

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CBN Governor, Olayemi Cardoso

Nigeria’s external reserves climb to $36.89bn, says CBN gov

Nigerians can look forward to economic improvements as the Central Bank of Nigeria (CBN) announces an increase in the country’s external reserves.

According to CBN Governor Olayemi Cardoso, the reserves have reached $36.89 billion as of July 16, 2024.

Cardoso made this announcement in Abuja during a briefing with the Senate Committee on Banking, Insurance, and other Financial Institutions.

He highlighted several positive economic indicators, including a significant reduction in the disparity between official and Bureau De Change (BDC) rates, which has decreased from N162.62 in January to N47.22 in June 2024. This reduction points to enhanced market efficiency and fewer opportunities for arbitrage.

Addressing the committee, Cardoso stated that various measures and strategies are in place to address emerging economic challenges. He noted that the increase in external reserves, up from $33.22 billion at the end of December 2023, is primarily due to revenues from crude oil-related taxes and third-party receipts.

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“In the first quarter of 2024, we maintained a current account surplus and saw improvements in our trade balance,” said Cardoso. “Our reserves as of the end of June 2024 are sufficient to cover over 11 months of imports of goods and services, or 14 months of goods alone. This is well above the international benchmark of three months, providing a strong buffer against external shocks.”

Cardoso also emphasized the robustness and diversity of Nigeria’s banking sector, which includes twenty-six commercial banks, six merchant banks, and four non-interest banks. He reported significant improvements in key indicators such as capital adequacy, liquidity, and non-performing loan ratios, highlighting the sector’s growing stability and resilience.

The governor noted the impressive performance of the equity market, with the All-Share Index rising by 33.81 percent and market capitalization increasing by 38.33 percent from December 2023 to June 2024. These gains reflect a growing confidence among investors.

While acknowledging these positive developments, Cardoso assured that the CBN remains committed to policies that support sustainable growth in the financial markets and overall economic stability.

Senator Adetokunbo Abiru, Chairman of the Senate Committee, opened the session by stating that the primary goal of the interaction was to receive updates on the CBN’s efforts, activities, and plans regarding monetary policy.

Nigeria’s external reserves climb to $36.89bn, says CBN gov

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