The United States is now the world’s largest oil and natural gas liquids exporter and would remain so for a while, overtaking both Saudi Arabia and Russia.
U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries with daily output exceeding 11 million barrels during the first 5 months of this year.
According to the International Energy Agency (IEA), the shale oil boom due to hydraulic fracturing and directional drilling has resulted in large volume gains in U.S. oil production on private and state lands where federal policies have little effect on output.
The US Congress had on Friday approved the lifting of the ban as part of a $1.1trillion spending bill. The bill was later signed by President Barack Obama.
President Barrack Obama had during his last visit to Kenya sometime in July this year stated categorically that his country would no longer buy Nigeria’s crude oil thus heightening the call by the Organised Private Sector (OPS) that the country should intensify efforts to develop the non- sector of the economy.
The US until then was buying almost 10 per cent of Nigeria’s total crude oil stock, but now buys a small amount of Nigerian crude oil due to the dramatic rise in domestic shale production.
With the lift on the ban of US’s crude export, Nigeria has lost its biggest customer bringing the fortunes of its crude differential trading to the lowest in the last ten years.
Oil analysts believe that Africa-US oil trade could completely stop in the next two to three years as other leading exporters, including Angola, Libya and Algeria, suffer the same fate as Nigeria. If that materialises, Africa will have to find new customers for its oil, going head-to-head with Middle East producers in the key Asian market.
Added to this are several other African countries such as Ghana, Cote d’Ivoire, South Sudan, Equatorial Guinea, Ethiopia and Kenya, among many others, that have made commercial oil discoveries or are in the process of doing so.
What this portends is that some years down the line, the crude oil market would turn from a sellers’ market to a buyers’ market, as the likelihood of an oil glut forces prices down.
Analysts argued that the reality of the US slamming the door firmly against Nigeria’s oil exports could be the wake-up call she needs. Nigeria, without doubt, has enormous natural and human resources that could still be tapped to stem her over-reliance on hydrocarbon exports.
Following the latest development, there strong indications that the US would saturate the global oil market with oil hence bringing Saudi Arabia and other OPEC member countries to their knees.
Since June 2014, crude oil prices have been on the decline and this has consequently exacerbated the dwindling fortunes of the Nigerian crude, with the nation’s crude differentials trading at a 10-year low.
There are also reports of Nigerian crude currently floating on ships with a significant amount finding home in storage tanks rather than in refineries as a result of the supply glut in the global market, which is dominated by largely by light sweet crudes.
A global oversupply has dramatically driven down the price of oil, with suppliers failing to reach agreements to address the glut.
Just 18 months ago, in June 2014, the price of oil was traded at $115 per barrel.
The price of US crude was also down on Monday, dropping 40 cents to $34.17 a barrel – the lowest since 2009.
Industry analysts said there is little sign that the downward trend would change, with more US and Russian oil reaching the markets.
Iranian oil supply will also resume in 2016, following the lifting of sanctions.
In November, the 12 members of OPEC maintained production at 30 million barrels per day, as first agreed in December 2011.
Findings also showed that oil firms have had profit margins squeezed, forcing them to cut spending in investment and exploration.
Governments of some oil producing countries have also been forced to cut spending as revenue from oil plunges.
Total OPEC crude oil production reportedly increased by 230,000 bpd in November over the previous month to average 31.70 million bpd. Crude oil output increased mostly in Iraq, by around 248,000 bpd, to average 4.3 million bpd.
However, experts have projected that Africa’s oil supply is bound to decline by 30,000 bpd to average 2.31 million bpd in 2016 year-on-year.
In Nigeria, the average cost of production by the International Oil Companies (IOCs) is about $30 per barrel, thus making it difficult for the country to sustain production in a very low price regime of $30 and below.
The drop in the global benchmark Brent crude to $39 per barrel last week is already a threat to Nigeria’s N6 trillion federal budget for 2016.
The Federal Executive Council (FEC) had approved the budgetary amount at its last meeting with a proposal for $38 per barrel as the oil benchmark price, down from $53 this year, 2015.
The Excess Crude Account, into which the country saves the difference between the market price of oil and the budget benchmark to provide a cushion when oil prices fall or extra cash is needed for spending on infrastructure, has been depleted in recent times as oil revenues plunged.
The account, which stood at about $4.11billion in October 2014, dropped to $2.45 billion in December that year, down from about $3.11 billion in November. The balance in the ECA was put at $2.1 billion in July this year.
Fuel Scarcity: Kachikwu Deploys NNPC Staff To Monitor Filling Stations
In an effort to ensure adequate supply of petrol during the yuletide and eradicate queues from fuel stations across the country, the minister of state for petroleum resources, Dr Ibe Kachikwu, has ordered the deployment of NNPC staff to filling stations across the country for to ensure the effective monitoring of the distribution system.
Speaking at an emergency meeting with senior staff of the corporation at the NNPC Towers, the minister said though there were a number of challenges in the supply and distribution system that hampered efficient distribution of products across the country, it was time NNPC rose above the challenges by ensuring that the special intervention supplies are not diverted or hoarded.
“This calls for effective monitoring of the supply system, especially at the end points, to ascertain that what is trucked out from the depots is delivered at the designated fuel stations and dispensed to the public in the most efficient manner. We need you to be out there to help achieve this; we can’t be at ease while Nigerians are going through so much pain to get fuel,” he stated.
He challenged NNPC staff to volunteer for the monitoring exercise, adding that standing up to provide creative solutions to challenges was what the new NNPC was all about.
Kachikwu therefore urged the staff to work towards achieving zero-queues at their respective stations as soon as possible, adding that they should be ready to sacrifice their Christmas break if need be.
Also speaking at the emergency meeting, the group executive director, Commercial & Investment, Dr Victor Adeniran, called on staff on monitoring duties to work closely with the Rapid Response Team by reporting any situation that needs urgent intervention such as low stock, delayed arrival of trucks or any underhand dealings.
Explaining further, Dr. Adeniran said the Rapid Response Team is made up of PPMC staff and representatives of law enforcement agencies that can adequately handle any challenge, adding that so far, about 200 trucks of the special intervention stock have arrived Abuja
Fuel Scarcity: 200 Truck Loads Of Fuel Arrive In Abuja – NNPC
The NNPC has deployed about 200 truckloads of fuel to Abuja to help reduce the ongoing fuel scarcity and ease yuletide celebration.
This is contained in a statement signed by the group general manager, Group Public Affairs Division, NNPC, Mr Ohi Alegbe, yesterday in Abuja.
“In continuation of the special intervention fuel supply for the yuletide season, another 567 trucks have been dispatched nationwide today,” he said.
Fuel Scarcity : Nigerians Paying For Jonathan ‘s Sins – FG
The federal government has blamed the lingering fuel scarcity on the ‘sins’ of former President Goodluck Jonathan.
LEADERSHIP recalls that in spite of payment of subsidy arrears to oil marketers, the fuel crisis has gone from bad to worse as the long queues in most of the fuel stations have shown no signs of decreasing.
Speaking to Villa Correspondents yesterday after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, minister of information, Lai Mohammed, alongside minister of budget and planning, Udoma Udo-Udoma disclosed that the fuel scarcity being experienced now is because of the inability of the last government to make adequate provisions for fuel subsidy.
According to the information minister, the present administration made sure that unlike before when the marketers used to import the major percentage of the fuel, NNPC has been involved in importation, because some of the marketers had stopped importing for a couple of months.
“If you see any fuel anywhere today, it is imported by the NNPC. We also inherited the vandalisation of the pipelines which has made it impossible for us to even transport the fuel. In tanks today we have 14 days’ reserve and off tank we have 10 days’ reserve.
He further explained that the Buhari administration inherited the vandalisation of the pipelines which has made it impossible to even transport the fuel.
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