Market optimism push oil price near $40 a barrel

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*NNPC Unveils COVID-19 Contacts-Tracing App

Oil prices rose sharply yesterday to a near three-month high on optimism that major producers will extend production cuts as the world recovers from the COVID-19 pandemic.

Brent crude was up 22 cents, or 0.6 per cent, at $39.79, the highest since March 6, having gained 3.3 per cent on Tuesday, while the US West Texas Intermediate crude (WTI) gained 33 cents, or 0.9 per cent, at $37.14, also the highest since March 6. The contract ended the previous session up 3.9 per cent.

It could be recalled that on the wake of the Coronavirus outbreak and subsequent fall in the price of crude oil to below $20 per barrel, the federal government, revised the 2020 budget benchmark from $57 a barrel to $30 a barrel. This amount was further revised downwards to $25 per barrel by the federal government, but pegged at $28 by the Senate on Tuesday.

Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicentre of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread.

The Organisation of the Petroleum Exporting Countries, (OPEC), and others including Russia may extend production cuts of 9.7 million barrels per day (bpd), or about 10 per cent of global output, into July or August, sources told Reuters.

“As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,” Capital Economics said in a note, estimating that global oil consumption will fall to just under 92 million bpd on average in 2020.

This compared with 100.2 million bpd in 2019, it said, before the pandemic swept through Europe and the United States, evaporating demand for everything from flying to trips to the dentist. Oil is likely to end up in “a small deficit later this year, which should provide some additional support to prices,” it added.

Meanwhile, as the nation open up for normal business transaction amidst growing fears of contacting the dreaded Coronavirius (COVID 19), the Nigerian National Petroleum Corporation (NNPC), said it has developed a contacts-tracing software application that would be deployed in all its locations across the country.

Similarly, in order to minimise human contacts in business transactions of its Downstream subsidiary, the Petroleum Products Marketing Company (PPMC), a Downstream subsidiary of NNPC, has also deployed a Sales and Distribution application in the Oil and Gas Secondary Model Portal that would enable marketers buy petroleum products online.

The development, the corporation explains is in line with its Transparency, Accountability and Performance Excellence (TAPE) agenda of the present leadership and the commitment to continually deploy Information and Communications Technology (ICT) for the purposes of operational efficiency and accountability within the system.

A statement signed by the spokesman of the National Oil Company, Dr Kennie Obateru, quoted the corporation’s Group general manager, Information Technology Division (ITD), Danladi Inuwa, as saying that the novel app was part of the NNPC’s sectoral contribution to curb the spread of the pandemic within its formations and Ministries, departments and agencies of the government.

“The Contacts-Tracing Solution is ready to be deployed, all the technical testing have been done and the solution is ready to go live, “Inuwa said.

According to him, “Everywhere you go, NNPC locations would be covered by this novel application which would reveal all information about persons visiting any official and should there be any medical challenge, the NNPC Medical would be able to track from the information at the data base all the contacts and advise properly.”

He said the application could also be used by members of staff of the corporation to document their private visitors at their homes, stressing that the novel application would enable the workforce to adjust adequately to the ‘new normal’ way of living to minimise the spread of the disease.

He also stated that in order to minimise human contacts in business transactions at the Petroleum Products Marketing Company (PPMC), a Downstream subsidiary of NNPC, in the face of COVID-19, the corporation has also deployed a Sales and Distribution application in the Oil and Gas Secondary Model Portal that would enable marketers buy petroleum products online.

He said the application, known as the Customer Express, would also enable marketers to register, validate and revalidate their Bulk Purchase Agreements online within a week, adding that the portal provides a dashboard that enables the corporation to track every molecule of products being imported, transported and sold at every given time.

“The Portal shows what product is in transit in terms of volume, what quantity is in the jetty, what volume has gone into the pipelines, what quantity has gone into NNPC depots, private depots and refinery depots. So, we have accurate accounting of every molecule of products that we have in our system,” Inuwa disclosed.

The NNPC ITD head said already, members of Major Oil Marketers Association of Nigeria (MOMAN) are now purchasing products online seamlessly while the Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Marketers Association of Nigeria (DAPMAN) and other relevant Downstream stakeholders are expected to start transacting business on the platform soon.

He stated that an application that can show the volume of stocks in the tanks of all NNPC Retail stations across the country has equally being deployed and the ticketing digitized, affirming that more technological innovations would be deployed in the months ahead.

Inuwa stated that despite the recent lockdown in the country, the NNPC business value chains were not affected as the corporation was well-prepared, adding that the NNPC had over 4,000 virtual meetings, 9.3million minutes of audio time, 6.7million minutes of video time and 2.1million minutes of screen shared times.

He added that the robust IT business continuity plan had enhanced the corporation’s workforce efficiency.

 

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