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OPEC’s Influence On The Oil Markets

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OPEC oil markets

OPEC’s Influence On The Oil Markets

Over the years, we have seen OPEC assert its dominance in the markets. In the short term, as prices recovered in the past month, it is now evident that OPEC has the tools necessary to adjust the markets. Albeit U.S shale remains the albatross on their neck, OPEC is still the leader of the oil markets. In April, when US President, Donald Trump called on Saudi and Russia to end the price war and help the markets recover, it was conceivable that Shale’s influence on the market was waning. Several companies felt the effect of the oil price crash, and Texas, the home of U.S energy had increased levels of unemployment.

OPEC has been regarded as a cartel and has acted as a cartel of late. Last week, for May, the Joint Ministerial Monitoring Committee (JMMC) pegged its compliance with production cuts at 87%. OPEC also restated the essence for all participating countries to reach 100% of their pledged cuts and make up for any previous deficits in quotas for July, August, and September.

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Iraq, Kazakhstan, Angola, and Nigeria prompted into action and ensured they fulfilled their parts of the cuts. Iraq, Nigeria and Kazakhstan have already submitted compensation schedules as the deadline for other underperforming members to submit was on the 22nd of June 2020. This sort of discipline is needed to offer support to prices, which translated into the recovery of the market.

The successful managing of the oil markets during this coronavirus era can be attributed to OPEC+, albeit they were responsible for the market plummeting months ago. In history, OPEC has always found a way to influence the markets during eventful periods. For example, the 1973 oil shock, the fall of the Soviet Union in 1991, and the Asian Financial Crisis all provided opportunities for OPEC to prove their mettle.

The Oil Cartel created in the 1960s allied with Russia and other nations, which results in the term “OPEC+.” According to Investopedia, this formation means they control over 50% of global supplies and 90% of proven reserves. What makes OPEC strong is the absence of alternatives to oil, and the de-facto leader Saudi Arabia, has the world’s lowest cost of production per barrel. The latter gives Saudi Arabia leverage to survive a crash in prices and creates some invincibility, which it leverages to dictate the market.

Conclusively, we have seen prices prop up and U.S shale suffering, OPEC+ seems like the influential deciding factor in the oil markets. It might lose its foothold in the future, but for now, the cartel calls the shots.

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Philippines’ Duterte Blocks Bill to Register Social Media Users

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Philippines’ Duterte Blocks Bill to Register Social Media Users

Author: Peace Salifu

Philippine President Rodrigo Duterte has rejected a proposed law requiring social media users to register their real names and phone numbers, citing threats to free speech and privacy, his spokesman said Friday.

The legislation which was approved by both houses of Congress in February, is intended to combat fake news, online abuse, text scams and militant bombings, also required mobile phone users to provide their personal details when buying SIM cards.

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While supporting efforts to tackle cybercrime and other online offences, Duterte said he opposed the inclusion of social media user registration in the bill.

He called for “a more thorough study” of the provision, citing concerns it could lead to “dangerous state intrusion and surveillance threatening many constitutionally protected rights” such as individual privacy and free speech, presidential spokesman Martin Andanar said in a statement.

Filipinos rank among the world’s heaviest users of social media, But the country has become a key battleground for misleading or fake news.

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Nearly 3.9 million people flee Ukraine says UN

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Nearly 3.9 million people flee Ukraine says UN

Author: Peace Salifu, Abuja

Nearly 3.9 million people have fled Ukraine since Russia’s invasion a month ago, UN figures showed Monday, with the flow continuing to slow.

The UN refugee agency, UNHCR, said 3,862,797 Ukrainians had fled the country, an increase of 41,748 from Sunday’s figures.

Around 90 percent of them are women and children, it added.

Of those who have left, 2.2 million have fled for neighbouring Poland, while more than half a million have made it to Romania. Nearly 300,000 have gone to Russia.

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Before the crisis began a month ago, EU member Poland was home to around 1.5 million Ukrainians.

In total, more than 10 million people, over a quarter of the population in regions under government control before the February 24 invasion, are now thought to have fled their homes, including nearly 6.5 million who are internally displaced.

Ukraine’s refugee crisis is Europe’s worst since World War II.

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Pakistan, Foreign Developer Reach Agreement on Massive Gold, Copper Mine

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Pakistan, Foreign Developer Reach Agreement on Massive Gold, Copper Mine

Author: Peace Salifu, Abuja

Two International mining companies have settled their long-running dispute with Pakistan in a deal that officials said will revive work on developing one of the world’s largest gold and copper deposits in the South Asia nation.

Canada-based Barrick Gold corp. and Chile’s Antofagasta had suspended work on the Reko diq mine in the impoverished southwestern Balochistan province in 2011 after Pakistan refused to grant them a license to develop the project, leading to a decade long legal battle.

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Pakistani Prime Minister Imran Khan’s office said in a statement that under the new agreement signed with Barrick on Sunday, the nearly 11 billion dollars’ penalty meted against Pakistan by a World bank arbitration court would be waived.

Barrick will invest nearly 10 billion dollars in Balochistan which will create more than 8,000 jobs.

It added that about 1 billion dollars of the investment would go into building roads, schools, hospitals and the creation of technical training institutes for mining in the sparsely populated Pakistani region.

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