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Oil hits six-week high on hopes of extended OPEC cuts

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Oil futures hit a six-week high on Tuesday, rising for a fifth day on optimism that OPEC and other countries may agree to extend production cuts in a bid to support prices.

Brent LCOc1 was up 26 cents, or 0.4 per cent, at 62.85 dollars a barrel by 0349 GMT, while U.S. crude CLc1 was 27 cents, or 0.5 per cent, higher at 58.12 dollars a barrel.

Brent touched its highest since August 1, while U.S. crude rose to the highest since July 31.

U.S. oil gained more than 2 per cent on Monday, while Brent finished the day 1.7 per cent higher as the market reacted to the appointment by Saudi Arabia’s king of his son, Abdulaziz bin Salman, as energy minister on Sunday.

Abdulaziz, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained.

He added that the so-called OPEC+ alliance, made up of OPEC and non-OPEC countries including Russia, would be in place for the long term.

A meeting of OPEC and OPEC+ countries in Abu Dhabi this week “is stirring up hopes for additional supply cuts,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.

Still, Russia’s oil output in August exceeded its quota under the OPEC+ agreements.

“Markets will need to see concrete progress on the production front, even as the world’s economy slows, to sustain gains,” said Jeffrey Halley, senior market analyst at OANDA.

Should oil end Tuesday higher it will be the longest run of gains since late July but headwinds remain as the U.S.-China trade war rumbles on.

Executives at the annual Asia Pacific Petroleum Conference said on Monday they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the U.S.-China trade war and increasing U.S. supplies.

In the United States, crude stockpiles are likely to have fallen for a fourth consecutive week last week, a preliminary Reuters’ poll showed on Monday.

Five analysts polled by Reuters estimated, on average, that crude inventories fell 2.6 million barrels in the week to September 6.

(Reuters/NAN)

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NSE market capitalisation hikes by N25 billion

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The Nigerian Stock Exchange (NSE) on Friday closed trading positively with the market capitalisation improving by N25 billion.

The News Agency of Nigeria (NAN) reports that the market capitalisation closed higher at N13.483 trillion compared with N13.458 trillion, an increase of 0.19 per cent.

Also, the NSE All-Share Index rose by 52.54 points or 0.19 to close at 27,698.69 from 27,646.15 achieved on Thursday.

Nestle led the gainers’ table, gaining N10 to close at N1,210.10 per share.

Stanbic IBTC followed with a gain of N2.90 to close at N42.85, while Nigerian Breweries gained 55k to close at N52.55 per share.

Dangote Sugar added 50k to close at N11.05, while Flour Mills advanced by 30k to close at N14 per share.

Conversely, Cadbury topped the losers’ chart, declining by 70k to close at N10.95 per share.

Zenith Bank trailed with a loss of 30k to close at N18.70, while Eterna dipped 25k to close at N2.75 per share.

Guaranty Trust Bank was down by 25k to close at N29, while Lafarge Africa also depreciated by 25k to close at N15.1 per share.

The volume of shares traded closed lower with an exchange of 177.57 million worth N5.92 billion achieved in 3,484 deals.

This was against a total of 245.44 million shares valued at N1.67 billion traded in 3,450 deals on Thursday.

Nigeria Breweries was the most active stock, exchanging 28.14 million shares worth N1.48 billion.

Guaranty Trust Bank followed with an account of 17.66 million shares worth N512.29 million, while FBN Holdings sold 15.96 million shares valued at N89.51 million.

United Bank for Africa sold 15.22 million shares worth N93.60 million, while Zenith Bank traded 14.55 million shares valued at N275.97 million.

(NAN)

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CBN, governors ‘agree to develop agric sector’ – Official

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The Central Bank of Nigeria (CBN) and governors of the 36 states of the federation on Thursday agreed to pool resources to develop the agricultural potentials in their domains and create jobs.

At a meeting in Abuja attended by the governors, the CBN governor, Godwin Emefiele, said the collaboration with the governors was a continuation of the apex bank’s efforts to enhance the country’s agricultural development.

Emefiele said the CBN was focused on boosting the production of identified agricultural commodities in the states, particularly those with high growth enhancement impact, create jobs, improve capacity of industries, and conserve foreign exchange for the country.

The CBN governor said following President Muhammadu Buhari’s directives, the bank has identified ten key commodities in the states as key enterprises to be developed along the value chain to achieve the stated objectives.

The commodities include rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock and dairy products.

Noting the substantial progress recorded in the past three months, Mr Emefiele said there was the need to interact more with the state governors to sustain the momentum.

“The ultimate objective is to make our states economically viable through enhanced investments by the private sector to create more economic opportunities at the sub-national level, engage our teeming youths in meaningful enterprises, improve internally revenue base for states to meet the developmental expectation of its citizens,” he said.

“This is in addition to what we (CBN) are doing through Anchor Borrowers Programme to support small holder farms in our rural communities,” he added.

Chairman of the Nigerian Governors’ Forum, Kayode Fayemi, who spoke on behalf of his colleagues pledged the cooperation of members of the forum with the CBN towards the objectives.

Other state governors, who spoke, also gave their commitment and determination to help develop zero-oil economy with the capacity to create jobs for Nigerians.

But Emefiele used the meeting to highlight some of the achievements of the CBN in the various sub-sectors of the economy.

In the cotton, textile & garment sector, he said through the Anchor Borrowers Programme, the CBN commenced the cultivation of 200,000 hectares of hybrid cotton, which was distributed to 200,000 farmers in 26 states.

The benefitting states, he added include Sokoto, Zamfara, Kebbi, Katsina, Kano, Kaduna, Yobe, Borno, Adamawa, Nasarawa, Jigawa, Oyo, Taraba, Gombe, Bauchi, Kwara, Niger, Kogi, Benue, Cross River, Edo, Delta, Ekiti, Ogun and Lagos.

Also, he said the bank imported about 6,000 metric tonnes of improved cotton seeds, in addition to about 2,000 metric tonnes sourced locally.

He said the total expected yield at the end of the current season as put at about 302,440 metric tonnes.

With the commencement of the distribution of inputs to cotton farmers in Katsina on May 6 this year, he said the bank’s target is to engage about 300,000 farmers to work and help achieve 450,000 MT of cotton in three years.

Emefiele said about 20 ginneries were identified in seven states, including Borno, Gombe, Kano, Katsina, Kebbi, Niger and Zamfara, to off-take the cotton financed by the bank.

“The ginners are to sell their lint to textile factories with the ultimate objective of producing textiles to meet the needs of the members of the uniformed services,” he said.

He confirmed that the CBN has just approved funds to be disbursed through the Bank of industry for the operation of the ginneries.

To expand the scope of its intervention, Mr Emefiele said the CBN met with representatives of the cotton, textile and garment implementation committee comprising governors of Kano, Kaduna, Kebbi, and the ministers for Agriculture, Trade and Investment as well as Power.

On the development of livestock, he said the CBN is determined to end the era when the country has been spending about $1.5 billion annually on the importation of dairy products like milk, yogurt, cheese and other milk derivatives.

He said a situation where over 95 per cent of milk products consumed in the country was imported was not healthy for the country’s economy, considering that the country’s dairy industry had huge potentials to create millions of jobs and foreign exchange savings.

The sector, he said, has an undeveloped meat processing infrastructure, declining tannery operations, inadequate large-scale private investments in cold storage and transportation, and insecurity arising mostly from pastoralists/farmers clashes, rustling, and other socio-economic challenges.

He said over 85 per cent of the country’s cattle, estimated at over 20 million, are owned and managed by small holder.

He said the CBN has resolved to support subsistent and nomadic herdsmen who who want to be integrated in the scheme.

Under CBN’s partnership on livestock development initiative in Niger State, he said about 26 Grazing Reserves haven been chosen in Mariga Locsl Government Area with land area of 31,000 hectares.

He said about 700 families with 300,000 heads of cattle resident have signed on the pilot project, while some companies have already expressed interest to invest in Bobi Grazing Reserve.

They include Friesland Campina WAMCO and Neon Agro, which he added, have agreed to take 10,000 hectares of land each, while Chi Limited and Irish Dairy are to develop 4,000 hectares each.

The Niger State government will retain the remaining 3,000 hectares for its development.

So far, he said FrieslandCampina WAMCO has cleared a land area of 695 hectares, with 190 hectares already planted with pasture.

He said the company has also completed a hydroponic centre and solar-powered borehole, while equipment for its Milk Collection Centre is be installed.

Under the bank’s livestock initiative, he said Arla Group, which is currently refurbishing a milk processing plant at Kagarko, has already invested about N12 billion to develop 6,000 hectares of land in Damau Grazing Reserve. When operational, 600 farmers would be supplying it with milk.

Also, he said the Promasidor Group has been granted consent to develop the 500 hectares Ikun Dairy Farm Project in Ekiti State, while Integrated Dairies Limited in Jos, Plateau State is to develop the Wase Grazing Reserve in partnership with the state government.

Nestle Plc is to develop its dairy project in Abaji, near Abuja.

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FG loses 22.6m barrels to oil thieves in six months – Obaseki 

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Governor Godwin Obaseki, head of the federal committee to check pipeline vandalism, Thursday declared that the Federal government has lost about $1.35 billion to oil theft in the first half of 2019.

He added that at least 22.6 million barrels of oil were “stolen” between January and July, and there is the risk of $2.7 billion worth of oil being stolen in two years, he said.

Obaseki said figures showing the “huge losses” were provided to his 13-member committee by the Nigerian National Petroleum Corporation.

Obaseki spoke to journalists after the National Economic Council meeting in Abuja. He said his committee had identified the reasons for the losses and had made recommendations to the government.

Read his full comments to reporters:

The 13-member Adhoc-committee chaired by me, submitted its report to the NEC today. The committee was constituted to address the impact of vandalization, oil theft, illegal bunkering on oil production. It was also to check the effectiveness of the activities of the joint task force and other security agencies in curbing the menace of oil theft. And also to consider the set up of special court to prosecute offenders amongst others.

The terms of reference of the ad-hoc committee are to include restoring and sustaining the four major trunk pipelines which move crude oil to the terminals, to assess the challenges and draw up a road map to guide further actions towards finding a lasting solution towards the problem. The committee could coopt individuals to facilitate its work and we are supposed to update the council regularly.

The adhoc committee discovered that there were huge losses. In fact, the NNPC reported to the committee that the 22.6 million barrels of crude oil valued at approximately $1.35 billion was lost during the first half of this year. And if this situation is not contained in two years we would have lost in excess of $2.7 billion.

The losses that were recorded in the first half of the year were broken down as follows:

The Nembe creek trunk-line lost 9.2 million barrel, the Trans-Niger pipeline lost 8.6 million barrel, the Trans-Focadoes Pipeline lost 3.9 million barrel, Trans-Escravos pipe we lost 877,000 barrel.

The adhoc-committee reported that the governance structure of the pipeline is such today that no one is held accountable whenever there are bridges and when these losses occur.

That the slow and inadequate prosecution of thieves despite numerous arrests and seizures have continued to encourage this menace.

That the absence of petroleum products filling stations in most of the oil-producing communities around the Niger Delta makes them resort to illegal bunkering and illegal refineries.

That huge internal and external market for stolen products exist across the west coast of Africa and also the subregion.

Therefore, the ad-hoc committee made the following recommendations:

That there is a need to restructure the maintenance and ownership of oil pipelines as a way of tackling the perpetrators of crude and other products.

That we should have a legal framework that will ensure that criminals are duly prosecuted, imprisoned and their assets confiscated.

That there should be special courts to trial offenders and also have a special legal task force to coordinate the prosecution of arrested offenders as well as trained special judges to handle cases of oil theft.

That NNPC should be encouraged to engage with the national intelligence agency (NIA) to identify the markets for stolen petroleum products across the continent.

That the governors of the oil-producing states should set up actions to develop the communities that are most prone and through which these pipelines run with their 13 percent derivation allocation as well as implement programmes that will be impactful and make life easy for the people. It noted that the NDDC in the Niger Delta Development Corporation which has the mandate to undertake development in this region should be restructured to perform its role better.

That they should emphasis creating employment opportunities for young people and youths in the region.

That the proposed funding arrangement to be jointly funded by the federal, states and the oil companies to ensure the communities through which these pipelines traverse get some benefits to encourage them to protect these lines.

Therefore, the council resolved as follows:

That recommendation should be presented to the president who is also the Minister of Petroleum for the final decision for implementation.

The chairman of the council also asked the NNPC to make a presentation to council on the state of PMS and other products which are smuggled across the borders.

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