BusinessDay 28 Mar 2018

WEST AFRICA
ENERGY intelligence
oil gas power
Wednesday 28 March 2018
C002D5556
BUSINESS DAY
POWER
Rethinking the
energy efficiency
option for Nigeria
finance people
appointments
Page 4
Babatunde Fashola, SAN, Hon. Minister of Power, Works & Housing, inspecting the panels of the Solar installations in the first phase of 500
Electrified Shops under the Federal Government’s Energizing Economies Initiatives at the Sabon Gari Market, Kano State recently.
Sonangol ditches
Trafigura for
Glencore, Total
Page 6
OPEC weekly basket price
DAY
PRICE
23/3/18 65.08
16/3/18 62.33
9/3/18 62.52
2/3/18 63.58
23/2/18 63.08
Source: OPEC
Debrief
OPEC still has role despite
changing global dynamics
FRANK UZUEGBUNAM
Contrary to speculations,
OPEC’s days
are far from numbered.
While global
oil market dynamics
may have changed, the Organisation
of Petroleum Exporting
Countries has proved that it still
has a role to play.
Crude oil prices fell under
$30 a barrel for both Brent and
West Texas Intermediate in 2016
prompting the oil cartel to reach
out to major non-OPEC oil producers
instituting in January 2017
a production cut deal meant to
take out about 1.2 million barrels
year average, though they have
been mulling other benchmarks
to gauge the success of their
cuts.
Compliance rate keeps increasing.
OPEC and its allies
achieved 138 percent of pledged
output reductions in February
2018, up from 133 percent in
January and the highest since the
deal aimed at clearing a glut began
in January 2017.
Currently, OPEC officials are
drafting a document that would
institutionalize the engagement
with Russia and the other deal
participants, though they have
offered no specifics on what such
a pact would entail.
Trade war fears is also lendper
day (bpd) from the market.
Despite initial doubts and
concerns, the deal has worked
leading to multiple extensions.
The Organization of Petroleum
Exporting Countries, Russia and
other non-OPEC producers extended
the pact until the end of
2018, with Khalid al-Falih, Saudi
Energy Minister recently hinting
that the curbs would need to continue
into 2019 to reduce global
inventories.
Commercial oil inventories
held by OECD countries fell to
2.855 million barrels in February.
OPEC and its allies in a production
cut agreement have said
they are aiming to reduce OECD
commercial stocks to the fiveing
a helping hand to the oil cartel.
Oil prices rebounded due to
growing tensions between the
Trump administration and China
regarding tariffs and the increasing
likelihood of a trade war. The
Trump administration recently
announced plans for a variety
of tariffs targeting an estimated
$60 billion worth of Chinese
goods. The move was met with a
stock market selloff, which also
dragged down crude oil.
Also, the market found support
from rising Middle East tensions.
Saudi air defences shot
down seven ballistic missiles
fired by Yemen’s Iran-aligned
Houthi militia, some of which
targeted Saudi capital Riyadh.