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ECONOMY

After early year slump, crude oil returns to profit

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Crude oil prices reached $65 on Monday after a drop in prices earlier in the year.

Brent crude, which is the international benchmark of crude oil, had opened 2018 at $64.73. By January 9, it hit $68 before falling to $61.64 by February 1.

Traders attributed the recent increase to a drop in the number of US drilling rigs for production and the reported job increase in the US which is expected to push fuel demand higher.

Brent sweet crude traded at $65.70 per barrel on Monday, an increase of 21 cents or 0.3 percent from its previous close.

“A falling rig count and the strong employment data may have helped support prices,” NAN quoted William O’Loughlin, investment analyst at Rivkin Securities, to have said.

According to Baker Hughes energy services firm, US energy companies cut oil rigs for the first time in almost two months, with drillers cutting back four rigs, to 796.
Reuters reports that although employees may not like the 0.1 percent rise in average hourly earnings, employers liked it and markets loved it.

“This is simply because the modest increase in wage growth indicates that the federal reserve will continue to have some sort of slack in the labour market to deal with and thus keep the Fed on course for three rate hikes in 2018 instead of four,” the report read.

“After all, the combination of robust economic data and limited inflation has been a key factor in keeping the bull market alive.”

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ECONOMY

NNPC: Funding plan for AKK gas pipeline project near conclusion

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The Nigerian National Petroleum Corporation (NNPC) says funding plans for the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project are almost complete.

Maikanti Baru, NNPC group managing director, made the disclosure at the 30th edition of Gas Technology Conference in Barcelona, Spain on Tuesday.

The AKK gas pipeline is designed to enable gas connectivity between the east, west and north, which is currently inadequate.

It would also enable gas supply and utilisation to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.

Represented by Saidu Mohammed, NNPC chief operating officer, gas & power, Baru said tremendous progress had been made towards securing funding for the project during President Muhammadu Buhari’s last visit to Beijing, China.

According to a statement by Ndu Ughamadu, NNPC spokesperson, Baru said there is a viable payback structure for the facility, noting that the financial partners are willing to cooperate with the state oil firm.

“Once you have the whole nation covered with a gas grid, industries will naturally spring up along the way and litter the entire country. That is our target in the long run,” the statement quoted Baru as saying.

Speaking on the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, Baru said the nation’s abundant gas reserves portend positive developments in the sector.

“We cannot consume out our gas resources in the next 50 years, even if we generate as high as 40,000mw for power,” he said.

“We are happy that in the NLNG is a credible company capable of competing in the international arena.”

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ECONOMY

BREAKING: Nigeria’s inflation rises for the first time after 18-month decline

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Nigeria’s inflation has risen for the first since it started its decline in January 2017.

This is according to the latest inflation report published by the National Bureau of Statistics on Friday.

According to the report, the rate at which prices of goods and services increased in August rose to 11.23% from 11.14%.

“The consumer price index, (CPI) which measures inflation increased by 11.23 percent (year-on-year) in August 2018. This is 0.09 percent points higher than the rate recorded in July 2018 (11.14) percent and represents the first year on year rise in headline inflation following eighteenth consecutive disinflation in headline inflation,” the report read.

“Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.05 percent in August 2018, down by 0.08 percent points from the rate recorded in July 2018 (1.13) percent).”

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ECONOMY

Nigeria, other West African countries fail to meet criteria for single currency

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Nigeria and five other West African countries have been unable to meet the criteria for the proposed single currency for countries in the zone.

Ngozi Egbuna, West African Monetary Institute (WAMI) director general made this known on Thursday in Abuja at the 37th meeting of the Committee of Governors of the Central Banks of the West African Monetary Zone.

The West African Monetary Zone (WAMZ) consists of The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

The Economic Community of West African States (ECOWAS) had approved the reduction of the convergence criteria from 11 to six.

At present, the three primary criteria are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long-term goal of not more than five per cent by 2019; and gross reserves that could finance at least three months of imports.

The three secondary criteria are public debt/gross domestic product of not more than 70 percent; central bank financing of budget deficit should not be more than 10 percent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 percent.

Egbuna said a lot of work needs to be done if the 2020 deadline will be met.

She said three countries, The Gambia, Guinea and Nigeria, attained three criteria; while Ghana and Liberia achieved two criteria, and Sierra Leone met one criterion.

Godwin Emefiele, governor of the Central Bank of Nigeria, was elected chairman of WAMZ at the meeting.

Addressing delegates, Emefiele said member countries should not be blinded by the desire of a common currency to the adverse factors associated with a unified monetary environment.

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