Tuesday, November 04, 2014

Crude Oil Price Slumps by 2.6 Percent

Written by Roseline Okere
Nigerian Guardian

A BARREL of United States’ benchmark crude oil declined by 2.6 percent, at $76.79 Tuesday, its lowest level since September 2010, while, Brent crude, the international benchmark, was down $2.14, or 2.5 percent, at $82.63 a barrel, its lowest level since October 2010.

  Meanwhile, stakeholders  in Nigeria’s oil and gas sector have said that there is need for African pricing benchmarking for crude oil and petroleum products as a basis for increased value and wealth creation from oil products.

Oil prices were little changed last week but settled a lower on Friday, down about 25 percent from mid-June highs, to set records for a fourth consecutive month of losses, and the largest monthly decline since May of 2012.

London’s Brent crude closed Friday at $85.69 – down 0.4 percent for the day, 0.3 percent for the week and 9.3 percent for the month.

New York futures closed at $80.54 after dipping below $80 — down 0.7 percent for the day, 0.6 percent for the week and 12 percent for the month. $80 a barrel is considered a major barrier, and should oil close below this number, many believe that breaching this barrier will contribute to further weakness.

  In a communiqué issued at the end of the Oil Trading Logistic conference in Lagos and made available to The Guardian yesterday,  the participants said while strong African demand for petroleum products is a good incentive for increased refineries on the continent, it is important to ensure equal access to export opportunities to Europe, Asia and the Americas for African refined products.

It added that there is a need for increased infrastructure investment at our seaports and inland depots, particularly in respect of Liquefied Petroleum Gas storage and evacuation, in addition to road, rail and coastal transportation.

  The stakeholders said that mismatches between pricing regimes should be discouraged in order to prevent informal markets and cross border fuel smuggling in the country.

  The communiqué added: “That African economic growth must eschew stagnancy in our Refineries and reliance on expensive long haul imports in order to reduce demand-driven scarcity of petroleum products

  “That there is need to put in place steady and efficient electricity supply for stronger growth in the regional oil sector.

  “ That Government Regulations need to be implemented in order maximise efficiency in petroleum markets and create employment for Africans in the downstream oil and gas sector”.

  The communiqué said that it is necessary to liberalise the market space beyond the present state to encourage more investments and increased efficiency; as a result, the current regime of petrol subsidies is no longer sustainable and should be scrapped totally for full deregulation.

It added that industry changing innovations, if carefully followed through, would contribute greatly to ensure a smooth flow in petroleum products supply.

  The stakeholders noted that it has become imperative to decentralise the activities in Lagos ports in order to reduce congestion and increase efficiency; as a result government is encouraged to sustain its efforts to open up the Lekki Free Trade Zone corridor. 

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