Saturday, January 30, 2016

Anadarko Petroleum (APC) Stock Climbing on Rising Oil Prices

NEW YORK (TheStreet) -- Shares of Anadarko Petroleum Corp. (APC - Get Report) are up by 5.02% to $39.12 late Friday afternoon, as oil prices increase today.

Crude oil (WTI) is gaining by 1.44% to $33.70 per barrel this afternoon and Brent crude is higher by 2.48% to $34.73 per barrel, according to the index.

The price of the commodity is rising today on hopes that a deal between major exporters to reduce output could ease the global glut, Reuters reports.

This week, Russia said it could work with OPEC members on lowering production, which it has declined to do for 15 years.

"If OPEC proposes to Russia production limits that do not undermine Russia's long-term objectives, and key Russian producers back the deal, Russia may indeed agree to production limits," analysts from ESAI Energy said, according to Reuters.

Anadarko Petroleum is an independent exploration and production company headquartered in The Woodlands, TX.

Separately, TheStreet Ratings Team has a "sell" rating with a score of D on the stock.

This is driven by multiple weaknesses, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered by the team.

The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: APC

Wednesday, January 27, 2016

ARA gasoil traders turn to floating storage


Clean product tankers are being used by traders as floating storage terminals just outside ARA ports as distillate capacity utilization remains high.

According to Genscape high storage levels at non-refinery storage facilities in the ARA have remained at 80 to 85% for distillates. This in turn has prompted some traders to use tankers moored just outside ARA ports or at offshore locations elsewhere in Europe, either close to some of the main load points or near key deviation points such as Gibraltar.

According to Colin Halling, senior analyst, EMEA oil at Genscape, some recent reports have suggested that as much as 640,000 metric tonnes of gasoil and ultra-low sulphur diesel are being stored in these oil tankers.

A gasoil vessel, the Captain Paris, left the export refinery of Ruwais in the Mideast Gulf on September 27, 2015. The ship has continued to float at anchorage just outside Rotterdam since arriving in the English Channel on December 9, 2015 with a laden draft.

This is one of several vessels being used for floating storage.

In January 2015, floating storage was back in favour globally with reports that rates for a 12-month ship charter had doubled, however, unlike the super-contango in 2009, only 20 million barrels was stored at sea.

Storage capacity constraints bring market volatility

Jeffrey Currie

Storage capacity constraints as a result of a significantly oversupplied crude market will bring more market volatility, according to Goldman Sachs.

In an interview with CNBC's 'Closing Bell', Jeffery Currie, global head of commodities research said that volatility will be a market trend for the future as will reaching storage capacity constraints.

He says: 'We think this is going to be a feature of the market: you just continue to slam against those capacity constraints in the coming months, creating a lot of volatility without any real trend.

'It just means more volatility, more grinding against those capacity constraints until finally you rebalance the market.'

He told the news broadcaster that at Cushing, Oklahoma, there is about three million barrels of spare capacity left, out of 89 to 90 million barrels.

He adds: 'The fact that we saw cash prices separate from forward prices tell us that we broke the cash-and-carry arb.'

Gulf Petrochem announces Fujairah expansion

news item image

A $50 million expansion of Gulf Petrochem's Fujairah terminal, adding more than 240,000 m3 of capacity, has been announced.

The storage company's terminal currently has storage capacity of 412,000 m3 with 17 tanks ranging from 13,000 m3 up to 40,000 m3.

The expansion, which is due to be completed by March 2017, will add 243,280 m3, which will increase capacity to 655,280 m3 across tanks ranking from 9,000 m3 to 37,699 m3. This addition capacity will allow the company to store Class I products.

The EPC tender is expected to go to market at the beginning of February, with the project slated to start in April 2016.

Upon completion, the group will be able to offer its customers inter tank transfer, provision for blending and mixing as well as connection to the ports terminal infrastructure to allow for inter-terminal transfers.

The terminal will have two new jetty lines and both will be connected to the matrix manifold of the Port of Fujairah and cater to black and white oil.

Prerit Goel, group director and board member, says: As a group we are extremely pleased to be in a position to be able to continue with our projects amidst a climate of low oil prices and uncertainty in the market.

'In the current climate, we continue to be largely unaffected by the ongoing price volatility due to prudent risk management practices in place and our diverse presence across the oil supply chain. This expansion is testament to those practices and measures set in place, and further compliments our strategy to enhance our standing as a global conglomerate operating in the oil space.'

Tuesday, January 26, 2016

Oil crash: Nigeria producing at $5 per barrel loss

*Oil theft more dangerous than price slide —Producers

By Clara Nwachukwu

LAGOS — As oil prices continue on the downward slide, Nigerian oil firms may be producing at up to $5/barrel loss, as average production costs for independent and marginal field producers is between $30 and $35/barrel.

Oil prices, yesterday, resumed their free fall, with Brent crude, similar to Nigeria’s sweet crude grade, falling 2.6 per cent to $31.34 a barrel following a 10 per cent rise on Friday, while U.S. oil shed 95 cents to $31.24.

To compound the producers’ woes, a significant proportion of what is produced is lost to oil thieves and pipeline vandals, which they insist are even more dangerous than the bearish run oil prices
Industry chiefs, who spoke exclusively with Vanguard on phone, argued that the turbulence in the international oil market deserves urgent attention.

Specifically, they insisted that the Federal Government needs to be talking with Nigerian producers very fast, if it must save indigenous companies from running aground and plunging the economy into deeper crisis than it is in already.

Impact on producers
Speaking on the impact of the oil crash on the producers, Chairman, Petroleum Technology Association of Nigeria, PETAN, Mr. Emeka Ene, said:

“Current price is below Nigeria’s average of between $30 and $35 per barrel. Most marginal field producers are producing above $30/barrel, and with pipeline vandalism activities, costs will shoot up by another $10/barrel, so oil production now is not sustainable.”

Ene, who spoke against the backdrop of oil crashing to 13-year lows of below $28/barrel last week, noted that the bearish run may soon fizzle out, whether shale or conventional oil is being produced at above $25/barrel. As such, the southward run is not favourable to any producer.

He also revealed that “a lot of Nigerian companies are out of work because they cannot compete with the multinationals, so government needs to have a serious talk with stakeholders in the industry.”

Oil theft, pipeline vandalism
Whether oil prices go bullish soon or not, other stakeholders feel that the benefits of the rise will be lost on Nigeria, if the government does not deal decisively with the twin incidence of pipeline vandalism and oil theft.

The President, Nigerian Association of Petroleum Explorationists, NAPE, Mr. Nosa Omorodion, maintained that “government needs to address the issue of oil theft and pipeline vandalism very fast because, even if price stabilises tomorrow or whenever, we will still not be able to reap the full benefits of that rise.”

He further argued that “oil theft and vandalism remain recurring and very worrisome because these issues are much bigger than oil slide, which is mostly driven by speculation, while these activities affect planning and are more cankerous than price slide. Operators are risking their assets including human resources to produce the oil, only to have it stolen thereafter.”

Against this backdrop, Omorodion, whose association is responsible for finding and producing oil, revealed that NAPE is planning a national seminar this month end to holistically address the issue of oil slide.

He said: “We are going to assess the length and breadth of the oil and gas industry because the price slide is not only affecting petroleum, but also other sectors of the economy.”

Apart from the impact on cost of production, the NAPE boss noted that “The current price is affecting so many things, as nobody is drilling for exploration now, and no one is thinking about fancy technology to boost production. Also, exploration will suffer as no company is exploring for new wells to grow reserves, and many small scale producers, which are mostly Nigerians, will shut down.”

Going forward

Currently, most producers, both OPEC and non-OPEC including the U.S., Saudi Arabia, Russia, Iraq and a host of others are producing at optimal capacities, which indicates that the downward glide may not let up soon. Also, some analysts have predicted that price may glide to below $20 or even $10/per barrel before rebounding.

Furthermore, with Iran’s oil also up in the market and expected to be ramped up systematically, compounded by the melt down in demand being fueled by the crisis in China, crude prices are facing more pressures. But producers recognise that the global economy is in need of some succour but differ on the best ways to go about it.

Noting that Nigerian service companies, who are the hardest hit by the crashing oil prices and provide about 650 value services across the industry, Ene insisted that Nigeria has the weapon in these companies to cushion the market turbulence but has not fully appreciated it.

According to him, “Nigeria has a thriving local oil industry, and if properly supported, can push down cost of production to $10 per barrel. About 10 to 15 years ago, industry cost was below $10 per barrel and nothing much had changed.

On his part, Omorodion believes that now is the time for oil companies to be at the most cost efficient by prioritising between wants and needs, while government becomes more fiscally disciplined and diversifying the economy.

But Ene argued that the solution is not in prescriptivism, like the majors calling for as much as 40 percent cuts in cost of services thereby killing off the companies, adding that government needs to identify and reduce unrealistic economic toll gates.

In his opinion, “The whole system is heated up, and cost of borrowing is very high. So far, conversation has been restricted to major operators and has not included the service companies driving operations in the industry.

“If we must produce oil at $10/barrel, government needs to be talking to Nigerian companies, who have invested in people and technology and are not repatriating their profits.”

Furthermore, he noted that a lot of the systemic costs being borne by indigenous firms contribute to the high cost of production, such as what he described as “Federal Government agents charging unrealistic charges like asking for $10million for permits need to be looked into.”

Monday, January 25, 2016

Oil falls 3 percent on swelling oversupply

By Karolin Schaps
LONDON (Reuters) - Oil prices fell 3 percent on Monday as Iraq announced record-high oil production feeding into a heavily oversupplied market, wiping out much of the gains made in one of the biggest-ever daily rallies last week.

Brent crude (LCOc1), the global benchmark, was down 90 cents at $31.28 a barrel by 1440 GMT (9:40 a.m. EST), losing 2.8 percent from its closing price on Friday, when Brent surged 10 percent.
U.S. crude (CLc1) traded $1.07 lower at $31.12 a barrel.

The losses came despite news that oil producer group OPEC was evaluating holding an extraordinary meeting. Qatar's energy minister said a request for such a gathering was being discussed.

Oil prices remain near 12-year lows as global supply continues to outstrip demand.

Iraq's oil ministry told Reuters on Monday oil output had reached a record high in December. Its fields in the central and southern regions produced as much as 4.13 million barrels a day, the government said.

A senior Iraqi oil official said separately the country may raise output even further this year.

"The news that Iraq has probably hit another record builds on the oversupply sentiment," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.

"The oversupply will keep markets depressed and prices low, and on the other hand short positions are in excessive territory," he said.

The closing of large amounts of short positions had caused a huge rally on Friday that was largely undone again on Monday, creating huge volatility in the oil market.

In a sign investors expect oil prices to rebound, data from the InterContinental Exchange showed speculators had raised their net long position in Brent crude during the week to Jan. 19. 

In the United States, one of OPEC's largest production rivals, a further drop in the number of oil rigs was expected to weigh on output.

U.S. investment bank Goldman Sachs said it expected production to decline by 95,000 barrels per day in 2016, including well deferrals, higher than previously assumed.

Analysts at Energy Aspects said global oil inventories would continue to fill in the next months, but should start to ease by mid-year.

OPEC's Secretary-General Abdullah al-Badri said at an event in London that signs were already emerging that the market was rebalancing.

He also said OPEC and non-OPEC producers needed to work together to tackle oversupply in order to prop up oil prices.

(Additional reporting by Meeyoung Cho in Seoul; Editing by Dale Hudson)

Saturday, January 23, 2016

NNPC to be Streamlined


The Nigerian government is looking to launch an initial public offering for assets owned by NNPC, its national oil and gas company by 2018, Nigerian Minister of Petroleum Resources and head of NNPC, Emmanuel Kachikwu said according to a Bloomberg report.

Included in the initial public offering will be shares in NNPC’s refining and distribution businesses, as well as “select” exploration and production assets. The sale is expected to help the state-run firm clean up its processes and run more efficiently.

NNPC will reorganize into four more efficient business units, rather than the more than a dozen, which are currently taking losses.

Wednesday, January 20, 2016

VLCC market weakens across the board

File VLCC Tankship DHT Ann: Photo courtesy of DHT

The tanker market hasn’t started off the New Year in the best possible manner as rates have retreated across the board. In its latest weekly report, shipbroker Charles R. Weber said that “the VLCC market was markedly weaker this week with rates in the Middle East and West Africa markets falling sharply with those in the Caribbean market following suit after a lag. Demand in the Middle East market rose modestly, rising to a tally of 25 from last week’s 22 while that in the West Africa market remained uninspiring with just two observed”.

The shipbroker said that “the January Middle East loading program came to an abrupt end with just 114 cargoes (below our expected range of 117‐122), which contributed to the negative pressure. More importantly, demand for February West Africa stems by Asian buyers has remained soft, which was reflected this week in the sustaining of light VLCC chartering activity. The lower West Africa demand reduced the number of units drawn from the Middle East market; this contributed to a wider supply/demand imbalance which was augmented by the appearance of more units on position lists (including a number of previously “hidden” positions) as well as the continued presence of disadvantaged units (recently ex‐dry dock, newbuildings, older units), which proved taxing on owners”.

CR Weber also noted that “with the January program concluded and just two additional January positions likely to be drawn to the West Africa market, the surplus of Middle East positions has driven up to 18 units. This represents a strong increase on the implied surplus as viewed just a week ago and a considerable increase relative to 2015‐end month average of nine surplus units – as well as the most overall since September 2014. The near‐term demand outlook soured after indications as to the Basrah loading program materialized and showed a light first‐decade (despite a stronger overall daily supply rate), which further compounded the impact on rates. As a result of these factors, the market witnessed a 45% w/w contraction of average earnings to ~$57,299/day. Despite the extent thereof, earnings are only a modest 14% below the 2016 average which represents a strong disconnect from the wide supply/demand imbalance. While we believe that February loadings will ultimately lead to a tighter balance and stronger rates by mid‐February, the present balance suggests that further rate losses are likely to materialize in the interim”.

Region-wise, in the Middle East, “assessed rates to the Far East averaged ws68.8 (basis 2016 flat rates), off 44.9 points, w/w, while corresponding TCEs lost 44% to an average of ~$60,742/day. The present assessment of ws57.5 yields ~$48,964/day. Rates to the USG via the Cape lost 18.2 points w/w to an assessed ws48.5. Triangulated Westbound earnings dropped 17% w/w to an average of ~$97,082/day while present assessments yield.

~$84,141/day”, said CR Weber. In the Atlantic Basin, “rates in the West Africa market continued to trail those in the Middle East and the WAFR‐FEAST route lost 24.3 points w/w to an assessed average of ws86. Corresponding TCEs dropped 25% to an average of ~$76,123/day. The present assessment of ws70 yields ~$60,030/day”.

Finally, “the Caribbean market was more active this week; however, with more units appearing on position lists and the earlier demand lull having left more units uncovered rates were under negative pressure which was compounded by some ballast units from Asia considering voyages from the Caribbean instead of the Middle East. This saw rates on the CBS‐SPORE route drop $1.25m to $6.50m lump sum”. said CR Weber.

According to the shipbroker “the pace of demand in the West Africa Suezmax market was largely unchanged from last week with the fixture tally rising by one to fourteen. While the final decade of the January program has been more active than the prior two (26 final decade vs. 16 and 18, respectively, for the first and second decades), the Suezmax‐oriented cargo volume for the month stands 14% below the 4Q15 average as the region’s spot market serviced exports appear to have declined by around 650,000 b/d. The slower Suezmax demand for January loadings has left a greater number of units available as charterers progress into February dates which – together with softer rates in the Black Sea and Caribbean markets – exerted negative pressure on rates this week. The WAFR‐UKC route shed 12.5 points to conclude at ws97.5 and given the growing supply/demand imbalance is likely to observe markedly lower rates from early during the upcoming week as this becomes more apparent to participants”.

Meanwhile, “rates in the Caribbean Aframax market commenced the week stronger on last week’s elevated demand and a measure of date‐sensitivity for early cargoes worked this week, which boosted rates for some cargoes with carryover effects for participants working normal dates. However, as the week progressed, demand levels moderated – this week’s regional fixture tally of sixteen represented a 35% w/w decline – and some earlier fixtures failed leading to a small number of prompt positions and an easing of rates from the week’s earlier highs. Having touched as high as ws135, the CBS‐USG route concluded at ws130, representing a weekly gain of 12.5 points. Lingering uncertainty over fog‐related port closures in the region likely prevented a further late‐paring of the week’s gains; once the full impact on itineraries is better known at the start of the upcoming week, the extent thereof is likely to prove influential on the direction rates take at the start of the week”, CR Weber said.

Finally, in the Panamax market, rates on the CBS‐USG route commenced the week with a correcting of last week’s observed gains, losing 10 points to ws140. However, with demand remaining fairly active this week, rates gained modestly to conclude at ws145. With supply/demand levels appearing balanced, rates should remain around through the start of the upcoming week”, the shipbroker concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide

The North Dakota Crude Oil That's Worth Almost Nothing

Oil is so plentiful and cheap in the U.S. that at least one buyer says it would pay almost nothing to take a certain type of low-quality crude.

Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it offered to pay $1.50 a barrel Friday for North Dakota Sour, a high-sulfur grade of crude, according to a corrected list of prices posted on its website Monday. It had previously posted a price of -$0.50. The crude is down from $13.50 a barrel a year ago and $47.60 in January 2014.

While the near-zero price is due to the lack of pipeline capacity for a particular variety of ultra low quality crude, it underscores how dire things are in the U.S. oil patch. U.S. benchmark oil prices have collapsed more than 70 percent in the past 18 months and fell below $30 a barrel for the first time in 12 years last week. West Texas Intermediate traded as low as $28.36 in New York. Brent, the international benchmark, settled at $28.55 in London.

“Telling producers that they have to pay you to take away their oil certainly gives the producers a whole bunch of incentive to shut in their wells,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said of the price that was posted as negative until Flint Hills revised it on Monday.

Jake Reint, a Flint Hills spokesman, said the price was fixed on the website after the firm incorrectly posted it as negative. The prices reported by Flint Hills Resources and rivals such as Plains All American Pipeline LP are used as benchmarks, setting reference prices for dozens of different crudes produced in the U.S.

Plains All American quoted two other varieties of American low quality crude at very low prices: South Texas Sour at $13.25 a barrel and Oklahoma Sour at $13.50 a barrel. 

Canadian Bitumen

High-sulfur crude in North Dakota is a small portion of the state’s production, with less than 15,000 barrels a day coming out of the ground, said John Auers, executive vice president at Turner Mason & Co. in Dallas. The output has been dwarfed by low-sulfur crude from the Bakken shale formation in the western part of the state, which has grown to 1.1 million barrels a day in the past 10 years.

Different grades of oil are priced based on their quality and transport costs to refineries. High-sulfur crudes are generally priced lower because they can only be processed at plants that have specific equipment to remove sulfur. Producers and refiners often mix grades to achieve specific blends, and prices for each component can rise or fall to reflect current economics.

Enbridge Inc. stopped allowing high-sulfur crudes on its pipeline out of North Dakota in 2011, forcing North Dakota Sour producers to rely on more expensive transport such as trucks and trains, according to Auers.

Producers outside the U.S. are also feeling pain. The price for Canadian bitumen -- the thick, sticky substance at the center of the heated debate over TransCanada Corp.’s Keystone XL pipeline -- fell to $8.35 last week, down from as much as $80 less than two years ago.

Negative energy prices are rare but not unprecedented. Propane traded at a negative value in Edmonton, a key pipeline hub in oil-rich Alberta, for about three months last year. Oil refineries sometimes pay people to take away low-demand products such as sulfur or petroleum coke to free up space. However, those are both processing byproducts, while oil is a raw material, according to Auers.

“You don’t produce stuff that’s a negative number,” Auers said. “You shut in the well.”

Tuesday, January 19, 2016

Gas Price Hits 47 Cents a Gallon in Michigan After Price War

The price of gas hit a stunning low -- just 47 cents per gallon -- in Michigan on Sunday.

Michigan was the first state to have gas under $1 in likely over a decade, Patrick DeHaan, senior petroleum analyst at, told ABC News today.

A gas station in Houghton Lake, Michigan, hit the 47 cents mark after a price war between three stations in the town, DeHaan said.'s data goes back to 2000 and DeHaan said he couldn't find any other averages that low in the U.S.

"This is something we don't see often at all or ever," DeHann said. "That's unheard of."

DeHann said he believed the next lowest price in the country was about $1.29, at a station in Virginia.
Gas prices in the U.S. are averaging at $1.889 today, down over 17 cents from last year's average of $2.061, according to Low gas prices can likely be attributed to low oil prices, as oil supply stays high and oil demand stays low, DeHann said.

The highest national average was $4.12 in 2008, DeHann said. In terms of individual gas stations, prices have gone as high as $6 a gallon, he said.

Monday, January 18, 2016

2015 African Rig Counts Plummet


Rig counts the world over showed over an average 31% drop in 2015 as oil prices continued to fall and projects stalled. Africa fared worse than average, going from 47 in December 2014 to just 27 in December 2015, a 42.6% difference, according to services firm Baker Hughes.

While Africa took the worst hit in what Baker Hughes terms international rig counts, the North American rig market took the worst hit globally, dropping nearly 60% in one year, going from 59 rigs operating offshore in December 2014 to just 24 in December 2015.

One region however showed growth, the Middle East. The region was the only one to see an increase in rig numbers, with 22.2% more rigs in December 2015 at 55, compared to December 2014’s 45.

Friday, January 15, 2016

Gibraltar benefits from bunker calls

Despite the direct and residual effects of the recent economic crisis on shipping worldwide, and increasing competition in the region, the Gibraltar Port Authority (GPA) reported growth in both the total number of ships calling for bunkers and in the quantity of fuel delivered last year.
The number of vessels using the Western Anchorage bunker slots was 5,571, while another 32 undertook commercial ship-to-ship transfer operations, according to figures produced by the GPA.

Gibraltar’s Minister for Shipping, the Hon Albert Isola, said, “I am delighted to see such a pivotal contributor to Gibraltar's economy grow from strength to strength, particularly at a time when neighbouring ports are reporting a slowdown in activity. 

“The Port’s robust performance is testament to the outstanding work of the GPA in its efforts to further improve efficiency and in aggressively marketing the port. It is also down to the enduring commitment of the bunker suppliers, shipping agents and other operators at

 the Port of Gibraltar for which I wish to express my sincere gratitude and support,” he said. 

CEO and Captain of the Port, Bob Sanguinetti, commented, 'Whilst early days, this trend reinforces Gibraltar's position as the Mediterranean’s leading bunker port and its resilience as a centre of maritime excellence. I look forward to continuing to work in increasing our range and quality of services together with the team at the GPA and, of course, our private sector partners.’ 

In April, the GPA will continue its push to promote the jurisdiction in a joint financial services/port marketing visit to Singapore and Hong Kong, headed by Minister Isola together with representatives from the private sector. 

Markets---VLCC rates halve

  Oman Shipping Company’s VLCC FIDA Joins VL8 Pool

What was described as a ‘brutal start of the year for VLCC owners’ saw earnings more than halve from their previous peak of about $100,000 per day for the benchmark MEG/East route. 
Too many ships, including newbuildings, ex drydockings and older VLCCs, strongly affected the trend and rates sharply declined, Fearnleys said in the broker’s weekly report. Many ships taken on timecharter early last year at relatively low rates were also weighing heavily on the sentiment.

Volumes both in the MEG and in West Africa were far from sufficient and the situation is not likely to change much before the imbalance ships/cargoes becomes more in line.

MEG and West African inactivity has persuaded owners to start ballasting towards the Caribbean putting downward pressure on Caribbean/East rates.

The new year started with a lot of Suezmax activity with rates reaching the WS85 mark for W Afr-UK/Cont/Med voyages. With the January programme evidently finished for the month, owners are sitting patiently in anticipation of the February cargoes coming out, as activity was limited in the past week.

As a result, rates took a small downward correction and are now to find a new fixing level. The MEG saw quite some activity, but rates moved sideways, as the market was fairly balanced for the time being.

North Sea and Baltic markets also moved sideways, despite the fact that ice restrictions were implemented in most major Baltic ports. This market would have seen firmer rates were it not for a third week maintenance programme at Primorsk, which led to a short fall of about 10 cargoes.

The North Sea market was still looking pretty soft, due to very low activity. However, going forward into the February fixing window, the ice market is expected to strengthen.

In the Med/B Sea, we have seen rates coming off even further this week, Fearnleys said. Dates were fixed far forward, and when delays in Turkish Straits have been reduced, charterers have had more time in hand and been able to hold back their cargoes.

We also see more ships coming back into a fixing position, which will put even more downward pressure on an already soft market, the broker concluded.

Among the recent fixtures reported, was the 2003-built VLCC ‘Olympic Legend’ reportedly taken by Shell for three months at a very firm $70,000 per day. Shell was also thought behind the fixture of the 2001-built VLCC ‘BW Utah’ for 18 months at $44,500 per day.

Other VLCCs reported fixed included a newbuilding, which was said to have been taken by Tesoro for 12 months at $40,000 per day and the 1996-built Yangtze Star thought fixed to Vitol for 12 months at $39,000 per day.

A couple of Aframaxes were reported fixed for short period business of around three months. These were the 2004-built ‘Sparto’ taken by Glencore for $37,000 per day and her sister ‘Pantelis’ by Litasco for the same rate.

Trafigura was believed to have fixed the 2013-built sister MR2s ‘Hafnia Phoenix’ and ‘Hafnia Leo’ for 12 months at $18,850 apiece, while LG Chemicals was said to have taken the 2008-built MR2 ‘Oriental Gold’ for 12 months at $18,500, illustrating charterers’ belief that rates are going north.

Another Hafnia- controlled tanker, the 2004-built Handysize ‘Hafnia Robson’ was thought fixed to Trafigura for 12 months at $17,500, while Maersk was said to have taken the 2009-built Handysize ‘Atlantic Jupiter’ for three years at an undisclosed rate.

In the newbuilding sector, another four MRs were believed to have been ordered at Hyundai Mipo by Greek interest Central Mare, bringing the manager’s total orderbook to 12 MRs. These were said to be declared options.

Andriaki was also believed to have firmed up options for two LR1s at STX for $46 mill each on the back of period business with Ultramar, while Minerva was rumoured to have ordered a series of tankers, the details of which were not available at the time of writing. 

Japanese chemical tanker operator Doun KK was said to have ordered two 38,500 dwt stainless steel chemical tankers at Kitanihon for $55 mill each.

In early January, Gener8 Maritime took delivery of two more VLCCs - ‘Gener8 Apollo’ and ‘Gener8 Supreme’ - from Daewoo and SWS, respectively.

They are the fourth and fifth in a series of 21 VLCC newbuildings and will enter Navig8’s VL8 pool.
Elsewhere, Navig8 Chemical Tankers has taken delivery of the 18th IMO II Interline coated 37,000 dwt chemical tanker ‘Navig8 Achroite’ from Hyundai Mipo. She will operate in the group’s Delta8 pool.

In the S&P market, Greek interests were said to be on subjects to buy the MRs ‘CPO Korea’ and ‘CPO Japan’.

They were built in 2009 and 2010 and were priced at $27.5 mill and $28.5 mill, respectively, according to brokers’ reports. 

Counting the Cost - Why is OPEC refusing to cut oil production?

Wednesday, January 13, 2016

Amid global price rout, China crude oil imports hit record

China Flag

China's crude oil imports hit a record 7.82 million barrels a day (bpd) in December, customs data showed, as the world's No.2 oil consumer took advantage of low crude prices to fill strategic reserves, but also increased its exports of refined fuels to an all-time high.

Crude imports for December were 33.19 million tonnes, up 21.4 percent on the month and 9.3 percent on the year, well above earlier estimates by Thomson Reuters Oil Research and Forecasts.

The December import figures may mean China challenges the United States to be the world's top importer of crude, although the U.S. Energy Information Administration has yet to provide its December data. Chinese monthly imports surpassed U.S. imports once, in April 2015.

China shipped in 335.5 million tonnes of crude oil for the year, the data showed on Wednesday. That was up 8.8 percent, or roughly 542,600 bpd, to 6.71 million bpd - also a new record.

Wu Kang, Beijing-based vice chairman of FGE Asia, said the two driving factors behind growth in 2015 were new demand from small, independent "teapot" refineries who gained the right to use imported crude oil in the latter part of the year, and stockbuilding in strategic reserves and commercial storage.

Nearly 20 small refiners have been granted quotas to use imported oil or import oil directly themselves.

China seized the chance to add up to 147 million barrels to its reserves in the first eleven months of 2015, according to Reuters calculations, following a more than 50 percent slump in oil prices LCOc1 since mid-2014.

China said it more than doubled the size of its strategic crude oil reserves between November 2014 and the middle of last year, building inventories at a rate exceeding analyst estimates of the country's stockbuilding.

Industry experts said Chinese firms could expand purchases possibly even more this year, as new tanks become available.

"2016 might be more interesting as the two driving factors are set to become more powerful as the government relaxed control both on crude imports as well as fuel exports, at a pace faster than thought," Wu said.

Demand for crude oil could rise 4.9 percent in 2016, the country's petroleum industry association said on Tuesday.

Even so, with waning economic growth, growth in demand for gasoline was moderate last autumn and appetite for diesel has fallen, putting oil demand - refinery throughput plus net imports of fuels - down 2.5 percent in November.

Fuel exports have risen as a result, hitting a record 4.32 million tonnes in December, or 975,500 bpd, up 5.4 percent over the previous month. Exports marked a record 693,300 bpd in 2015, up 21.9 percent.

Net fuel exports were 1.48 million tonnes in December.

China has allowed independent refineries to export fuel for the first time, having granted an estimated 440,000 tonnes of quotas under the first batch release.

(This version of the story corrects paragraph 13 to show comparison is with previous month, not with December 2014)

(Reporting by Adam Rose and Chen Aizhu; Editing by Joseph Radford)

Sunday, January 10, 2016

How the oil collapse stole Russia's Christmas

Pipes are pictured at an oil gathering facility owned by Bashneft company near the village of Shushnur, northwest from Ufa, Bashkortostan, January 28, 2015. The signs read: ''Oil''. REUTERS/Sergei Karpukhin

A plunge in the oil price to 12-year lows during Russia's New Year and Orthodox Christmas break means the country returns to work on Monday with its economic recovery and once-mighty savings war chest on the line.

The equity and currency turmoil in China that rippled through world markets during Russians' 10-day festive holiday pushed Brent crude futures to around $32 a barrel, down from $45 at the start of December and a step closer to the $20 price trough predicted by Goldman Sachs.

Crude's collapse from $100 a barrel since mid-2014 has already pummeled Russia, which relies on energy for about half its budget revenues and 40 percent of its exports. The latest slide compounds the problems facing President Vladimir Putin ahead of elections in 2018.

Due to thin local holiday trading, the rouble fell only 2 percent last week, but the 75-per-dollar rate is not far now from the 80.1 record low hit 13 months ago.

Back then, Russia defended the currency by raising interest rates by 500 basis points overnight; a sharp rouble move lower in coming weeks could force a repeat of that action.

Inflation would surge, and the recession that the government had forecast ending this year would be extended.

In the worst-case scenario with oil staying at or below $30 per barrel, Russia's coffers would empty in just over a year, leaving little to show for a decade of bumper oil earnings.

For Putin, the $100 billion-plus Russia still has in two rainy-day funds, is "the ultimate insurance policy to navigate the election," says Christopher Granville, managing director of Trusted Sources, an investment consultancy.

Granville notes this year's planned budget deficit of 3 percent of annual economic output hinges on $50-a-barrel oil, a gap the government had hoped to fill by borrowing and dipping into the national reserve fund.

But oil at $30 would blow the hole out to 5 percent or more, Granville says. If that happens, Putin may have to risk irking voters with tax hikes and savage spending cuts that throw the economy deeper into recession.

Or he must dig even deeper into rapidly-dwindling savings.

Borrowing on international bond markets or privatizations are also possible but neither is attractive in view of depressed share prices and high borrowing costs.

Investors' appetite for Russia is further dampened by continuing Western sanctions imposed to punish Moscow's actions in Ukraine, although the sanctions do not directly prevent Russia from borrowing.

The two sovereign funds are already being depleted. In early December, they contained $130 billion, down from mid-2014 peaks around $180 billion. The government also has to find a trillion roubles, some 1.2 percent of GDP, that has been promised to bail out state development VEB.

"The national savings buffers are worth around 6.5 percent of GDP at present and that's the basis of saying they will run out of cash by the middle of next year - unless the oil price goes up," said Granville, who had adjusted the paper value of the funds to reflect off-budget commitments.

"But to eke out the buffers until the election will require meaningful spending cuts now... Desperate times call for desperate measures."

Many Russians will return from the holidays only too aware that life is about to get harder.

Civil servants' salaries will be frozen for the third year, pensions are to rise less than inflation; foreign goods and vacations will become even more expensive.

The blow to living standards is leading some to draw parallels with Russia's previous financial crisis in 1998, when the government defaulted and the rouble lost three-quarters of its value.

"It feels like the 1998 crisis all over again. My salary's value in dollars has more than halved, I now earn less than I did in 1997," said Yelena, a Moscow-based newspaper journalist who asked that her surname not be used.


Investors who fled Russia after the rouble collapse have gradually been returning, encouraged by double-digit bond returns last year, a slight thaw in ties with the West and signs the economy was over the worst.

Expectations interest rates would fall further after 600 bps in cuts over 2015 allowed the government to predict economic growth of 0.7 percent and 1.9 percent this year and the next.

Those forecasts will be in danger if oil does not recover, admits David Hauner, head of CEEMEA debt and strategy at Bank of America Merrill Lynch who has been bullish on Russian bonds.

"As long as oil keeps falling, Russia will keep falling," Hauner said. "We do need to acknowledge that if the market gets disorderly, everything could change quickly and the ice is getting somewhat thin now."

Hauner remains positive on Russian bonds however, noting BAML expects crude to bounce to $50 per barrel later in 2016.

But oil markets are bracing for bigger falls, partly on fears China's economy is in worse shape than it appears.

Investors have started acquiring "put" options that give them the right to sell Brent futures at $25, reflecting expectations of falls below that price. And Russia's Urals crude blend usually trades $2-$3 below Brent.

UBS strategist Manik Narain is one of many analysts reviewing his Russia forecasts - late last year he estimated the rouble would average 75 per dollar in 2016.

The lower oil goes, the harder it is to predict outcomes for the rouble and the economy, he said.

"The big risk is of non-linear currency moves because oil going from $30 to $20 will provoke a very different rouble response from a $40-$30 move," Narain said, citing a likely panic effect among citizens and businesses.

(Additional reporting by Dmitry Zhdannikov; graphics by Vincent Flasseur; editing by Philippa Fletcher)

Oil plunge sparks calls for Congress to act

As the price of oil plunges to its lowest point in 12 years — and threatens to drag the broader U.S. economy down with it — lawmakers say Congress should consider helping teetering energy companies with policy fixes beyond the decision to lift the oil-export ban.

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) and House Energy and Commerce Chairman Fred Upton (R-Mich.) will meet next week to discuss an energy package expected to move in both chambers later this year.

Among the proposals under discussion: Expediting the process for exporting liquefied natural gas, and upgrading infrastructure to move energy to market more quickly and cheaply.

Another top priority for the two Republicans is loosening environmental and other regulations. But moves in that direction are highly unlikely while a Democrat remains in the White House.

With oil currently below $33 a barrel, some on Capitol Hill are calling for quick action.

Some lawmakers are floating the possibility of taking retaliatory trade measures against Saudi Arabia, which has flooded the market with cheap oil in what some analysts see as a bid to drive America’s growing shale oil industry out of business.

The stock market slumped again on Friday, capping off the worst year-opening week in the history of the Dow Industrial Average and the S&P 500. Analysts blamed tumbling oil prices, after the stock market in China stabilized overnight.

“We’re trying to help the industry and we know that exports will help whether it’s crude oil or LNG,” Upton said, referring to liquefied natural gas. “I’m intending to sit down with Lisa next week.

“The two of us have worked together already and I remain confident that if she can get a bill out of the Senate…that we can a get a bill that is in fact bipartisan that the president can sign,” he added.

Upton said the House version of the energy legislation includes language to expedite natural gas exports.

Sen. John Hoeven (R-N.D.) claimed the Obama administration has proposed nearly 100 regulations for the oil and gas industry, ranging from restrictions on methane and carbon dioxide to limits on operating on federal land.

“We really are right now locked in a global battle between OPEC and Russia, countries like Venezuela — we’re really battling out to see who’s going to provide oil and gas,” he said. “That’s why it’s so important that government create an environment where we can compete.”

Legislation passed last month to lift the four-decade ban on oil exports is expected to boost exports by 500,000 barrels a day but so far it has had little impact on prices.

An energy package is one of the few major pieces of legislation expected to pass the Senate this year after Majority Leader Mitch McConnell (R-Ky.) did his best to clear the decks before the election year.

A wave of bankruptcies in the energy sector have spread alarm on Capitol Hill and Wall Street, where plunging oil prices, along with China’s fluctuating currency, set off a round of stampede selling this week.

Goldman Sachs has warned that oil may sink as low as $20 a barrel, which would shake financial markets by sinking energy stocks, driving companies into bankruptcies and setting off a round of junk-bond defaults.

Third Avenue Investment, a New York-based fund, last month blocked clients from pulling their money, prompting a sell-off of high-yield bonds and evoking memories of the 2008 meltdown.

Growing tensions between Saudi Arabia and Iran over the execution of a Shiite cleric might have been thought to have boosted prices by raising the specter of regional conflict. But that had little effect on oil prices this past week.

Bankruptcies among oil and gas companies have hit the highest quarterly level since the midst of the 2008 financial crisis, Bloomberg Business reported last month.

Oil and gas companies have laid off more than 250,000 workers and that number could swell in the months ahead.

North Dakota Rep. Kevin Cramer (R) said lawmakers could begin to mull retaliatory tariffs against Saudi Arabia in the future but emphasized he is not advocating for that yet.

“I’m very hesitant to go down that path at this time but clearly that would be a possible option should the Saudis not play fair. Because as much as I advocate for free and open markets, I also advocate for fair markets,” he said.

Saudi Arabia, taking advantage of its low extraction costs, has refused to curb oil production in a bid to expand market share and undercut competitors. This has raised the prospect of the U.S. government taking action to level the playing field for domestic companies.

“I’m not prone to a lot of government intervention in terms of propping industry up, per se. What would be the most helpful is to roll back regulations that get in the way of further development and profitability,” said Cramer, who cited the Endangered Species Act as one burdensome regulation.

“Obviously they have access to our market and I suppose to some degree there is a role that can be played there. I’m not at the point where I’m ready to advocate tariffs or restricting their access necessarily,” he added.

If the energy industry continues to sink, other proposals will pop up in the energy negotiations due to kick off next week.

Hoeven said he wants to help the energy industry by pushing legislation to allow companies to gather natural gas from oil wells on federal land.

“The other thing of course is infrastructure. We also have to help our industry compete by having infrastructure. That means the right mix of pipelines, transmission lines, rail, roads,” he said.

He has introducted the North American Energy Infrastructure Act to expedite the construction of pipelines.

Friday, January 8, 2016

First US crude export cargo leaves Texas


The first US crude oil shipment for 40 years has left Corpus Christi bound for Europe.
This follows the US Government’s lifting of the ban on crude exports on 18th December last year.
Ionia Management’s 2003-built Panamax ‘Theo T’ sailed on 31st December with a cargo of Eagle Ford Shale light crude.

The cargo was sold by ConocoPhillips to Vitol and the tanker was loaded at NuStar Logistics’ terminal at Corpus Christi, Texas. She was believed to be heading for Italy.

Enterprise Products Partners has also negotiated a cargo with Vitol for a shipment due to depart early this month.

The 600,000 barrel cargo of domestic light crude was due to load at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel during the first week of January, 2016.

NuStar CEO Brad Barron said the company was expanding its operations at Corpus Christi by building a second tanker jetty. The new jetty would bring a combined loading capacity to 90,000 barrels per hour.

The port authority is also planning to deepen the channel and build new infrastructure to handle larger tankers for crude and condensate exports.

US crude oil exports will change the oil and tanker market, according to Poten & Partners.

Most analysts agreed that the impact of the lifting of the ban on oil markets would be of limited importance, at least in the short-term, due to the world’s oil glut, while also, the currently narrow WTI-Brent spread renders US crudes uncompetitive in the export market, Poten said.

As for the export infrastructure, only US Gulf ports have the capability to load crude oil and most of these facilities only support Aframaxes but some, such as Corpus Christi, will be able to handle Suezmaxes in the future.

VLCCs may be used in the short term if the economics support transhipments in the US Gulf. Louisiana Offshore Oil Port (LOOP) is the only VLCC facility in the area. And is believed to be considering offering loading operations by 2018 and adding storage capacity, but reconfiguring LOOP will take time and money, Poten pointed out.

As a result, it was thought that the initial US crude oil exports will probably be undertaken on Aframax hulls.

Poten said; “Once exports start flowing, Aframax crude tankers will be the initial beneficiaries. If production continues to increase and pricing is favourable, Suezmaxes and VLCCs may come into the mix - which would open up Asian markets. The impact on product carriers will depend very much on the relative competitiveness of the US Gulf refiners.

“The lifting of the US crude oil export ban will probably be a net negative for the US Jones Act market. This market did receive a boost from the coastwise transportation of crude oil in the past, but these movements, which already declined significantly in 2015, may disappear altogether,” the broker said.

Thursday, January 7, 2016

Saudi Arabia is considering an IPO of Aramco, probably the world’s most valuable company


SAUDI ARABIA is thinking about listing shares in Saudi Aramco, the state-owned company that is the world’s biggest oil producer and almost certainly the world’s most valuable company. Muhammad bin Salman, the kingdom’s deputy crown prince and power behind the throne of his father, King Salman, has told The Economist that a decision will be taken in the next few months. “Personally I’m enthusiastic about this step,” he said. “I believe it is in the interest of the Saudi market, and it is in the interest of Aramco.”

The potential listing comes as Saudi Arabia grapples with the damage wreaked on its economy by an oil-price collapse to below $35 a barrel, as well as mounting tensions with its arch-rival Iran, following the execution of Saudi cleric Nimr Baqr al-Nimr in early January. It is just one possible step in an ambitious plan to balance the budget and throw open the country’s closed economy.
Prince Muhammad made the remarks during his first on-the-record interview, on January 4th, in which he ranged broadly, from the geopolitics of the region, to his efforts to foster radical economic reform in Saudi Arabia.

The prince has held two high-level meetings recently on the possibility of floating Saudi Aramco shares. Officials say options under preliminary consideration range from listing some of its petrochemical and other “downstream” firms, to selling shares in the parent company, which includes the core business of producing crude.

Officials say Saudi Aramco is worth “trillions of dollars”, but it is one of the world’s most secretive oil companies and reveals no information on revenues and offers only limited information on its hydrocarbon reserves.

Prince Muhammad says that a listing would make the company more transparent. Diplomats say investors are already being sounded out. The talk is of first floating part of the company in Riyadh—perhaps 5%. In time that could rise, though the kingdom would continue to exercise control over the company.

The upstream part of the business would be most attractive to investors. At 261 billion barrels, Saudi Aramco’s stated hydrocarbon reserves are more than ten times those of ExxonMobil, the largest private oil company. Saudi Aramco is also one of the world’s lowest-cost oil producers, thanks to the ease of pumping oil in Saudi Arabia.

Speaking about Iran, Prince Muhammad defended Saudi Arabia’s decision to suspend diplomatic relations on January 3rd after its embassy was set ablaze in Tehran by crowds protesting against Mr Nimr’s execution. The prince denied that there was a risk of outright conflict. “A war between Saudi Arabia and Iran is the beginning of a major catastrophe in the region,” he said. “...For sure, we will not allow any such thing.” However, on January 7th, Iran said that Saudi warplanes had attacked its embassy in Sana’a, Yemen’s capital.

Since Prince Muhammad became head of the defence ministry, and the Council for Economic and Development Affairs, just over a year ago, the country’s geopolitical swagger has been coupled with plans for sweeping economic change at home. These plans include gradually eliminating subsidies on electricity, water and housing; seeking private-sector provision in health care and education; introducing a 5% value-added tax on non-essential goods; and studying the complete or partial privatisation of over two dozen agencies, including the national airline and telecoms firm.

Asked if Saudi Arabia was undergoing a “Thatcherite revolution”, Prince Muhammad replied: “Most certainly.”

These Shale Drillers Could Soon Default As Credit Options Run Out

 Shale Output Unchecked by Rig Cutback as Top Fields Become Focus

Everyone knows that at $35/barrel oil, virtually every U.S. shale company is cash flow negative and is therefore burning through cash and other forms of liquidity such as bank revolvers and term loans, just as everyone knows that should oil remain at these prices, the U.S. shale sector is facing an avalanche of defaults.

What is less known is who will be the next round of companies to default.

One good place to get an answer is to find which companies' bankers are quietly tightening the liquidity noose (because they don't want to be stuck holding worthless assets in bankruptcy or for whatever other reason), by quietly reducing the borrowing base on existing credit facilities.

It is these companies which find themselves inside this toxic feedback loop of declining liquidity, which forces them to utilize assets even faster, thus even further shrinking the borrowing base against which their banks have lent them money, that will be at the forefront of the epic bankruptcy wave that is waiting to be unleashed across the U.S., leading to tens of billions of defaults junk bonds over the next 12-18 months.

So, without further ado here are 25 deeply distressed companies, whose banks we found have quietly shrunk the borrowing base of their credit facilities anywhere from 6 percent in the case of Black Ridge Oil and Gas to a whopping 51 percent for soon to be insolvent New Source Energy Partners.

Wednesday, January 6, 2016

Cushing inventories start 2016 at all-time high

 main story image

Favourable storage economics continue to pay dividends to the tank terminal industry as Cushing inventories reached a new all-time high.

Genscape recorded that for the week ending January 1, 2016, crude inventories at the North American hub surpassed the previous all-time high reached in April 14, 2015 by almost 347,000 barrels.

The widening 12-month price contango structure for West Texas Intermediate has been in part attributed to the surge. Additionally, year-end tax reduction strategies added an incentive to move crude into storage tanks at the hub.

Utilisation is however 2% below the all-time high set in March 2011.

A total of seven operators based there are above 80% capacity utilization, which suggests that most of their storage volumes are likely merchant, or leased to others, rather than operational.

These operators, which have a combined operational capacity of 31.184 million barrels, have only 4.745 million barrels of available capacity.

Genscape notes that three different companies are also expanding their storage assets, with 1.93 million barrels of capacity under construction. These projects are expected to be online by the end of the first quarter of 2016.

Tuesday, January 5, 2016

Nigerian president: we have firm evidence of oil corruption

Nigerian president, Muhammadu Buhari, while being interviewed in Washington in June 2014.
Nigerian president, Muhammadu Buhari, while being interviewed in Washington in June 2014. Photograph: AP

Nigerian authorities have seen documents suggesting that the proceeds from past crude oil sales were diverted to personal accounts instead of reaching government coffers, the president, Muhammadu Buhari, said on Wednesday.

Africa’s biggest economy faces its worst economic crisis in years, since it relies on oil exports for about 58% of government revenue. The sharp fall in oil prices over the past year has hit those revenues hard. The problem has been exacerbated by the longstanding mismanagement of oil revenue.

Buhari has previously said treasury coffers were virtually empty when he took office in May and that “mind-boggling” sums of money had been stolen. 

The 73-year-old former military ruler, who won April elections after campaigning on an anti-corruption ticket, outlined progress made by his government in a two-hour “media chat” with three journalists broadcast live on state television. 

“We have some documents where Nigerian crude oil was lifted illegally and the proceeds were put into some personal accounts instead of the federal government accounts,” he said.

He added that some stolen money had already been recovered by the government, but did not disclose the sums involved and said he could not provide more details because various cases were being taken to court. 

The president answered questions on a wide range of topics, from security to the economy, and from unemployment to the kidnapping by Boko Haram of 200 school girls from the town of Chibok in April 2014.

Buhari said the government was prepared to hold talks with the Islamist militant group in a bid to secure the girls’ release. “If a credible leadership of Boko Haram can be established and they tell us where those girls are, we are prepared to negotiate with them without any preconditions,” he said. 

However, he said there was no firm intelligence on the whereabouts of the girls, whose abduction in April 2014 prompted an international outcry, or whether they are still alive. 

Boko Haram have been waging a six-year campaign to create an state of Islam in northern Nigeria. More than 1,000 people have been killed in attacks by suspected Boko Haram militants since Buhari took office. In the latest flare-up, two suicide attacks killed at least 48 people on Monday. 

The president also reiterated his belief that Nigeria’s currency should not be devalued further, despite the central bank’s growing struggles to keep the naira at current levels. Instead he backed measures imposed by the central bank to restrict access to foreign exchange, which have not gone down well with investors. 

“The foreign currency restrictions cannot be lifted because the money is not there,” the president said.