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Oil Price Crash Not Bad As It Seems – See Reasons!

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Oil Price

Oil Price Crash – Just recently the Oil Price took a Noze Dive below $0 and many people saw this and thought the overall price of oil is negative, there’s nuance

Oil Price Crash – The picture in the market is not as bleak as this eye-popping headline would suggest.

Oil Price

Why it Turned Negative?

The West Texas Intermediate crude contract that fell more than 100% on Monday is for May delivery, and it expires Tuesday. With the coronavirus pandemic leading to unprecedented demand loss, and with storage tanks quickly filling up, there is no demand for this oil contract expiring Tuesday.

That’s why it turned negative.

SIMPLE MEANING

The Producers would pay to get this oil off their hands because there is no one that needs that crude this week with the country shutdown. Futures contracts trade by the month. The contract for June delivery was 16% lower at $21.04 per barrel.

So after the May contract expires on Tuesday, oil could be back above $20.

News Cred: CNBC

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The U.S. Oil Fund, which tracks the price of various oil futures contracts, fell just 10%.

Trading volume was also relatively thin in the May contract. According to data from the CME Group, volume stood at roughly 126,400. By comparison volume for the June contract was nearly 800,000.

John Kilduff of Again Capital attributed the plunge in the May contract to the fact that “the physical oil market conditions are a disaster, with growing concerns about finding available storage.”

Longer term, he said the picture looks brighter.

“The higher priced, longer-dated futures contracts are indicative of the market expecting some level of clearing in the cash market over the course of the next several months,” he told CNBC. “Given the rapid decline in the U.S. oil rig count and the expected cutback by OPEC+ members that is a reasonable assumption.”

That said, he noted that as the subsequent contracts reach expiration, they could engage in their own “death march down towards the super-low cash prices.”

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President Buhari Warns ECOWAS Against Tenure Elongation

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President Buhari Warns ECOWAS Against Tenure Elongation

President Muhammadu Buhari has strongly warned that with the enormous socio-economic and security challenges confronting west Africa, the sub- region cannot afford another political crisis in the guise of tenure elongation.

Buhari said this while addressing the 57th Extraordinary Session of the Authority of ECOWAS Heads of State and Government in Niamey, the Republic of Niger.

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“It is important that as leaders of our individual member states of ECOWAS, we need to adhere to the constitutional provisions of our countries, particularly on term limits. This is one area that generates crisis and political tension in our sub-region.

“As it is, the challenges facing the sub-region are enormous; from socio-economic matters to security issues, the ECOWAS sub-region cannot therefore afford another political crisis, in the guise of tenure elongation,’’ he said.

He also expressed worry over the premature adoption of ECO as a single currency by French speaking West African Countries, stressing the need for them to return to the agreed roadmap.

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Business Africa

Nigerian Stocks Beat Global Slowdown With N154B Gain

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Nigerian Stocks Beat Global Slowdown With N154B Gain

Nigerian stocks continued to increase as investors took advantage of low share prices and continued to buy bargain stocks throughout the week, resulting in the stock price closing with an average return (increase) of 1.17% at the weekend, the second highest gain among global advanced and emerging markets. Kenya recorded an average return (increase) of 3.4%

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Trading reports at the Nigerian Stock Exchange (NSE) at the weekend showed the overall consensus across the market was for buying stocks across major sectors as investors continued to react positively to news of how much money is being made by companies in the first half of 2020. The benchmark index for Nigerian equities, the All Share Index (ASI), closed weekend with average increase of 1.17 per cent, equivalent to a net increase across all the shares in the index of N154 billion

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Business Africa

COVID-19 AND ITS IMPACT ON THE NIGERIA AVIATION SECTOR – SONI-ODOH

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nigeria aviation sector

COVID-19 AND ITS IMPACT ON THE NIGERIA AVIATION SECTOR By SONI-ODOH

The corona virus has impacted world economies negatively and has caused terror in major sectors , especially the Nigeria aviation sector.

The sector is one of the major income earners in the world ,even for a developing country like Nigeria.

Over the last couple of years, the Nigerian aviation sector has contributed massively to the country’s gross domestic profit(GDP). Both government and private individuals invest yearly into the sector.

According to the national bureau of statistics, the Nigerian aviation sector contributed nearly 150billion naira to the gdp in 2018 which saw a 33 percent increase by the last quarter of 2019 but it was recently revealed by the Minister of aviation,Hadi Sirika that Nigeria has recorded a massive loss of over 21billion Naira in the aviation sector due to coronavirus in Nigeria.

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With domestic airlines already implementing salary cuts and retrenchments of workers, over 125,370 jobs are at risk. For an industry which relies on flight and cargo shipping, the question becomes, how does the Nigerian government save its aviation industry so it doesn’t get beyond recovery, how does it ensure private airline owners don’t run out of business and that hundreds of citizens don’t become unemployed.

With flight operations suspended, it is necessary for the government to look into other options like direct financial support and tax wavers for the airlines as a way of sustaining the aviation sector.

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"Also found worthy of honour was Bashir Abubakar, an Asst Comptroller-General of Customs, who rejected a bribe of $412,000 per container offered him by drug traffickers seeking to bring 40 containers of Tramadol into Nigeria. A fine example of incorruptibility, worthy of emulation"

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