—-rallies allies to saturate global market with excess supply
Eyewitness reporter with agency report
The Joe Biden administration came to this conclusion as the last resort after its appeal to OPEC and its allies, OPEC+, to raise production quota to boost oil supplies failed.
Consequently, governments from some of the world’s biggest economies may have agreed with the US in principle when they said they were looking into releasing oil from their strategic reserves, after a rare US request for a coordinated move to cool global energy prices ahead of a meeting of major oil-producing nations.
The Biden administration has asked a wide range of countries, including China for the first time, to consider releasing stocks of crude.
Other major consumers India, Japan and South Korea were also involved in discussions.
As the world economy rebounds from the pandemic, Washington and other nations have been frustrated that producers in OPEC+, the Organization of the Petroleum Exporting Countries and allies such as Russia, have rebuffed US requests to speed up additional oil supplies.
OPEC nations, for their part, have said that world economies remain too fragile to warrant increasing supplies quickly.
To that end, the market slumped on Friday after Austria announced that it would reimpose a full nationwide lockdown due to soaring coronavirus cases, and Germany, Europe’s largest economy, may soon follow suit.
The market has been weakening for several weeks as investors have started to anticipate an increase in supply worldwide.
With gasoline prices and other costs rising, Democratic US President Joe Biden also faces political pressure ahead of midterm congressional elections next year.
A Reuters poll in October showed 67 percent of US adults agreed that inflation is a very big concern.
Members of Biden’s national security team had discussed the need to meet fuel demand, White House spokesperson Jen Psaki said.
“That is an ongoing conversation and one we are having with a number of partners,” she added.
OPEC+ plans to meet on December 2nd, 2021.
The group has been raising output by 400,000 barrels per day (bpd) per month, gradually unwinding record production cuts made in 2020 when the pandemic dissipated fuel demand.
This week, Secretary-General Mohammad Barkindo said OPEC expects an oil supply surplus to begin building next month.
Other countries have been pressing OPEC for some time, including China and India.
“This is not a case of supplies not being available,” Hardeep Singh Puri, India’s Oil Minister, told a conference in Dubai on Wednesday.
“There are five million barrels a day of supplies available which have not been released for whatever reason.”
While OPEC+ has been raising oil output by 400,000 bpd per month since July, the producer group still has about 3.8 million bpd in supply cuts that it has not yet returned to the market.
Several of the group’s members have been unable to meet production targets due to years of under-investment.
“Half of (OPEC+’s) members can’t meet their quotas given their own under-investment,” Goldman Sachs analysts said.
OPEC+ in April 2020 cut output by more than 10 million barrels a day in response to the swift spread of the coronavirus pandemic.
China’s state reserve bureau told Reuters it was working on a release of crude oil reserves, but declined to comment on the US request.
It would also mark the first time that China, the world’s No. 2 oil consumer and largest importer, would be involved in a coordinated release with the United States.
China held its first-ever public auction of oil reserves in September.
Consultancy Energy Aspects said in a note to clients that Beijing is expected to release another 10 million to 15 million barrels of crude from its reserves in eastern Zhoushan in its next auction round.
“Any oil released from the Chinese SPR needs to be refilled within 90 days,” Energy Aspects said.
“The market should focus on where these countries will find crude to refill these tanks given just how low stocks are.”
The United States has the largest strategic reserve at more than 600 million barrels.
The US SPR was set up in the 1970s after the Arab Oil Embargo to ensure the nation had adequate supply to weather an emergency.
In the last several years, the shale boom has pushed US output to rival that of Saudi Arabia and Russia.
That has enabled the United States to become less dependent on energy imports from other nations, particularly members of OPEC.
The United States and its allies have coordinated strategic petroleum reserve releases before, such as in 2011 when supplies were hit by war in OPEC member Libya.
Buhari, Jonathan, Obasanjo, Babangida, Abdusalami, Osinbajo, Atiku, others to spend N13.8billon from N27.5 trillion 2024 budget
The Eyewitness Reporter
The Federal government has earmarked the sum of N13.8 billion in the 2024 budget as the cost of upkeep of
former presidents, vice presidents, heads of state, Chiefs of General Staff, retired heads of service, permanent secretaries, and retired heads of government agencies and parastatals.
The beneficiaries include former Presidents Olusegun Obasanjo, Goodluck Jonathan and Muhammadu Buhari, ex-vice-presidents Atiku Abubakar, Namadi Sambo and Prof Yemi Osinbajo.
Also expected to benefit from the windfall are ex-military Heads of State, General Yakubu Gowon and General Abdusalami Abubakar, as well as a former dictator and self-styled military President, General Ibrahim Babangida, and a former Chief of General Staff, Commodore Ebitu Ukiwe (retd.).
Also, N1tn was provisioned for the public service wage adjustment for government Ministries, Departments and Agencies (including arrears of promotion and salary increases, and payment of severance benefits and minimum wage-related adjustments).
A breakdown shows that the entitlements of former presidents/heads of state and vice presidents/chief of general staff will cost N2.3bn. At the same time, N10.5bn is proposed as benefits for retired heads of service, permanent secretaries and professors.
The payment of severance benefits to retired heads of government agencies and parastatals is proposed to cost N1bn.
Other allocations include N65bn for the Presidential Amnesty Programme for the reintegration of transformed ex-militants; N1bn for the Office of the Presidential Adviser on Energy; and N108bn for unnamed special projects.
The government is also proposing the sum of N40bn to offset electricity debts owed to power distribution companies by all MDAs.
President Bola Tinubu unveiled the N27.5 trillion budget estimates for the 2024 fiscal year.
The budget was presented to a joint session of the National Assembly on Wednesday, where it is currently undergoing scrutiny and deliberation for final approval.
In his presentation, he declared, “The 2024 Appropriation has been themed the Budget of Renewed Hope.
The proposed budget seeks to achieve job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.
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