Page 12 - DMEA Week 35 2021

DMEA NEWS IN BRIEF DMEA

POLICY output increases by OPEC+ as benchmark industries, such as agriculture, textile, and
Brent crude traded above $70 per barrel, close related industries.
OPEC+ sticks to gradual oil to multi-year highs. [O/R] about 12 million direct and indirect jobs by
Reports say, the country may create
The OPEC+ joint technical committee
output hikes, ups demand (JTC) on Tuesday presented an updated harnessing existing gas resources to spur other
report on the oil market in 2021-2022.
critical sectors of the economy, especially
forecast report, which has not been made public, industrial activities.
OPEC+ sources said on Tuesday that this
Insisting that a gas-based industries,
OPEC and its allies on Wednesday agreed forecast a 0.9 million bpd deficit this year as most especially the petrochemical (fertilizer,
to stick to their existing policy of gradual oil global demand recovers. methanol, etc) must be enabled to support
output increases, despite revising its 2022 The report had initially forecast a surplus large industries, such as agriculture, industrial
demand outlook upwards and ongoing U.S. of 2.5 million bpd in 2022 but this was later applications, textile and so on, CBN had
pressure to raise production more quickly. revised to 1.6 million bpd due to stronger noted “as part of efforts at stimulating finance
The Organization of the Petroleum demand, the sources said. to critical sectors of the economy, CBN
Exporting Countries and allies led by Russia As a result, commercial oil inventories introduces the N250 billion intervention
agreed in July to phase out record output cuts in the OECD, a group of mostly developed facility to help stimulate investment in the gas
by adding 400,000 bpd of oil a month. countries, would remain below the 2015- value chain.”
Wednesday’s decision means that OPEC+ 2019 average until May 2022 rather than The apex bank noted that large-scale
will release 400,000 bpd to the market in the initial forecast for January 2022, the JTC projects under the intervention would be
October again, after already doing so in presentation showed, the sources said. financed under the Power and Airlines
September. The next OPEC+ meeting is Rystad Energy’s head of oil markets Intervention Fund (PAIF), in line with
scheduled for Oct. 4. Bjornar Tonhaugen said it was not yet clear existing guidelines regulating the PAIF, while
“While the effects of the COVID-19 “whether demand will be able to grow as small-scale operators and retail distributors
pandemic continue to cast some uncertainty, quickly as OPEC+ and the market predicts, will be financed by the NIRSAL Microfinance
market fundamentals have strengthened and given the risk of new lockdowns to fight the Bank (NMFB) or any other Participating
OECD stocks continue to fall as the recovery unresolved COVID-mutant spread.” Financial Institution (PFI) under the
accelerates,” OPEC+ said in a statement. REUTERS Agribusiness/Small and Medium and Medium
OPEC+ experts on Tuesday revised the Enterprises Investment Scheme (AGMEIS).
2022 oil demand growth forecast to 4.2 Relief as Nigeria moves to The objectives of the scheme according to
million bpd, up from a previous 3.28 million the bank includes improved access to finance
bpd, potentially building the case for higher unlock gas with investment for private sector investments in the domestic
output in future. gas value chain and stimulate investments in
The 2022 outlook looks optimistic based Nigerians will heave a sigh of relief as the the development of infrastructure to optimize
on 2021 data. OPEC+ expects demand to Central Bank of Nigeria (CBN) in partnership the domestic gas resources for economic
grow by 5.95 million bpd after a record drop with the Ministry of Petroleum Resources, development.
of about 9 million bpd in 2020 due to the moves to drive the National Gas Expansion The bank revealed further in the
pandemic, but demand only rose by some 3 Programme (NGEP) with N250 billion. framework for the implementation of
million bpd in the first half of 2021. The development is expected to fast-track intervention facility for the national gas
“Demand has disappointed relative to lofty the adoption of CNG as the fuel of choice expansion programme that the initiative was
expectations and there are still headwinds, for transportation and power generation, as critical to provide leverage for additional
particularly in Asia. We only expect demand well as LPG as the fuel of choice for domestic private sector investments in the domestic
to rise back to 2019 levels in the second half of cooking, transportation and captive power gas market and boost employment across the
2022,” said Amrita Sen, co-founder of Energy as well as driving the development of gas- country.
Aspects think-tank. based industries particularly petrochemicals Indeed, with over 50 per cent of gas
The United States has called for speedier (fertilizer, methanol, etc) to support large being imported into the country despite

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