Crude prices dipped on Thursday as brimming U.S. and Asian fuel inventories returned investor attention to a large global supply overhang, cutting short a price-rally and restricting Brent crude futures to below the $50 a barrel mark.
International benchmark Brent crude oil futures were trading down 7 cents at $48.98 per barrel at 0413 GMT, having closed down 1.8 percent.
U.S. West Texas Intermediate (WTI) crude futures were at $46.74 a barrel, down 3 cents, after dropping 2.8 percent on Wednesday.
Traders said price falls this week had truncated a rally that pushed crude up by more than 20 percent earlier in August on talk of a potential deal by oil producers to freeze output in an effort to rein in oversupply
Hopes of a deal were dampened by record output from the Organization of the Petroleum Exporting Countries (OPEC) and little prospect of voluntary restrictions.
“Brent also came under pressure after (OPEC-member) Iraq said it still isn’t producing as much oil as it should be, raising concerns that OPEC supply will continue to increase,” ANZ bank said on Thursday.
With output high, not just from OPEC but also other top producers like Russia, and the demand outlook shaky, analysts said there was little prospect of an end to the glut, which has pulled down crude prices from over $100 a barrel to their current sub-$50 levels since 2014.
Analysts said that high storage levels pointed to an ongoing supply overhang that was weighing on markets.
In the United states, commercial crude oil stocks rose by 2.5 million barrels to 523.6 million barrels.
In refined products, stocks around the world are also brimming as demand slows while refinery output remains high.
“Ample inventories were due to weaker demand in Asia, but more generally were driven by excess supply generated by refiners maximising runs, notably to produce gasoline in the U.S.,” BNP Paribas said.
China’s implied oil demand fell 0.3 percent from a year earlier to 10.58 million barrels per day (bpd) in July, according to Reuters calculations using official data.
“In Asia, China’s July economic statistics confirmed loss of growth momentum,” BNP added.
The French bank said that the “lacklustre demand prospects (and) the augmented capacity of the global refining system … suggest (that) a distillate supply overhang will persist”.
(Reporting by Henning Gloystein; Editing by Richard Pullin and Joseph Radford
by John Ofikhenua
SPOKESMAN for the Nigerian National Petroleum Corporation (NNPC) Malam Garba-Deen Muhammad yesterday said the corporation was the first to report to the Presidency that nine banks were hiding its $2.33 billion.
He was reacting to reports in some online media (The Nation not inclusive) that the NNPC was indicted for not remitting the money.
In a chat with The Nation, Muhammed said: “Some social media are trending that NNPC has been indicted for some money not remitted. It is the same old story. The fact is that NNPC reported those nine banks to the Presidency.
“And the Presidency now directed the CBN to go after those banks. It is not the other way round. NNPC is not indicted.”
According to The Nation story on the fund, nine deposit money banks (DMBs) sailed into trouble waters for hiding over $2.274 billion belonging to the NNPC from the TSA.
The newspaper reported that the CBN wielded the big stick by banning the banks from forex transactions.
The banks suspension is to remain in force until they remit all the funds to the TSA.
President Muhammadu Buhari has been briefed on the breach by the banks. They have been mandated to move the monies to the TSA before any consideration for their re-entry into forex trading.
Two days ago, the banks came under fire from the apex bank, which accused them of engaging in round tripping and threatened to punish the breach.
Initially many of them declined comments on the development, except the UBA which said: “Our attention has been drawn to report of the ban of UBA from the foreign exchange market by the CBN over the non-remittance of NNPC/NLNG dollar deposits.
“We wish to state very categorically that UBA has completely remitted all NNPC/NLNG dollar deposits.
“We thank all our numerous customers, business partners and other stakeholders who have reached out to us on account of this report.”
Before their official reports yesterday, reliable sources from some of the banks had said that the issue was being resolved. They said the matter was not an infraction in the sense of the word, adding that if it were so, the apex bank would have since debited their accounts at source.
A Fidelity Bank official who pleaded for anonymity said: “NLNG was paying dividends from the investment of the government in the company to the NNPC. These dividends had accumulated to about $5 billion.
“The NNPC was investing this dividend payment in a dedicated account as fixed deposits with commercial banks. When the government raised the issue that the dividends should have been paid into the Federation Account, the CBN Governor invited the Chief Executive Officers (CEOs) of all the banks that had the funds to Abuja for a meeting on the following a reconciliation of the amount in each bank with the records of CBN/NNPC and agreed a repayment time table of the funds with the banks.
“As at the time the TSA implementation commenced in September 2015 some of the banks had paid back over 50 per cent of the funds based on the repayment timetable.
“This repayment by the banks was the bailout of $2.1bn (N414billion) that was shared by the FGN and state governments in July/August 2015
“When the TSA commenced, the banks reported these funds as part of government deposits they had, but it was not remitted like other TSA funds because of the remittance timetable that had been agreed with the CBN.
“The NNPC invited banks earlier this year to submit a revised repayment plan for the balance of the funds. From the above you can see that the CBN and NNPC had a clear picture of the status of these funds with the banks.”
An official of the FCMB who spoke on the condition of anonymity said: “We are working with the Central Bank of Nigeria on an amicable resolution. This is really a function of the dire macroeconomic situation and liquidity in the FX markets, rather than concealment, or willful non-compliance by banks.”
A Diamond Bank source also said that the bank never concealed any funds.
According to the official, who pleaded not to be named, Diamond Bank had actually paid $500 million to date, adding that the bank approached the CBN to ask that the balance be paid in naira, since the value of the local currency has fallen so badly and because of acute shortage of forex
by Collins Nweze,
BANKS are carrying a heavy load of Non-Performing Loans (NPLs), which rose 78 per cent year-on-year to N649.63 billion last May.
The “worrisome” trend should be tackled, Central Bank of Nigeria (CBN) Governor Godwin Emefiele said yesterday.
He was speaking at the third National Credit Reporting Conference organised by the Credit Bureau Association of Nigeria (CBAN) in Lagos.
To him, the state of bad loans in the sector implies that efforts need to be doubled in credit information sharing to stem this “worrisome” trend.
He said the apex bank had made it mandatory for all financial institutions to have data exchange agreements with at least two credit bureaux. “All banks are required to obtain credit report from at least two credit bureaux before granting any facility to their customers whilst quarterly portfolio checks must also be carried out to enable them determine borrowers’ current exposure to the financial system,” Emefiele said.
Emefiele, who was represented by the Branch Controller at CBN Lagos Office, James Iyari, said the apex bank had also approved the payment of one-off sign-on fees with credit bureaux for all the microfinance banks and other micro financial institutions licensed by the CBN.
This, he said, would support effective use of the infrastructure provided by the private credit bureaux with a view to deepening the subsector.
Emefiele warned that bank customers who continuously issue dud cheques to their clients will have their cheque booklets withdrawn by their banks, which have the right to withdraw them from customers who record three defaults.
According to the CBN boss, since it is difficult to prosecute serial dud cheque issuers, the right thing for banks to do is withdraw the booklets form such offenders.
He said after the defaulting customer records the third dud cheque issuance, it would have become clearer that such a person is unfit to have cheque books and will have the booklets withdrawn – in line with the provisions of the Dishonoured (Dud) Cheques Act of 1977.
The names of the offenders are also to be forwarded to the three private credit bureaux and the Credit Risk Management System (CRMS). Except with the prior written approval of the CBN, such names will not be removed from the CRMS.
Emefiele said: “There is a dud cheque Act, and the CBN receives returns on dud cheques, which is passed to credit bureaux. We want the credit bureaux at their own end to capture those bank customers that consistently issue dud cheques. If you issue dud cheques, you are a bad customer.”
He said the CBN will continue to supervise the credit bureau industry to ensure that the financial sector is robust and safer.
Speaking on the theme: “Credit bureau and access to finance: Nigeria’s success story”, Emefiele said this year marks the 25th year anniversary of credit reporting in the country. It has no doubt contributed to the resilient financial system that is propelling the growth of the nation, he added.
“The CBN is saddled with the responsibility of ensuring the stability of financial system and has been formulating policies aimed at achieving a sound and stable financial system. In realisation of this objective, it has vigorously pursued the development of the key financial infrastructure such as the payments and credit reporting systems,” he said.
The CBN chief disclosed that the National Assembly was considering a bill on National Credit Reporting that will bring all stakeholders under one regulatory platform.
To make the proposed Bill meet international standards, the CBN, in collaboration with the International Finance Corporation and the CBAN, reviewed the draft Bill and articulated some amendments to the document. “The recommended amendments would be presented to the National Assembly during the public hearing on the Bill for adoption into the Credit Reporting Bill,” he said.
The three licensed private credit bureaux have been performing their functions and this has complemented the CBN’s CRMS in ensuring the effective management of credit risk within the banking system.
CBAN Chairman Mrs. Jameelah Sharrieff-Ayedun said the group will continuously project the use of credit information as a viable tool for access to finance. She said credit bureau remains critical in nation-building as it ensures that only people with integrity get access to credit. Credit bureaux are key in stimulating economic growth through the provision of critical risk management and fraud prevention services to the financial services sector, Mrs Sharrieff-Ayedun said.
The sector, she added, is making it possible for more people within the population to have access to credit
By Ebriku John Friday
The Central Bank of Nigeria (CBN) on Wednesday lifted it’s ban on the United Bank for Africa (UBA) as the other eight deposit money banks (DMBs) remain banned from the foreign exchange market, for hiding over $2 billion belonging to Nigerian National Petroleum Corporation (NNPC) from the Treasury Single Account (TSA).
‘Tokunbo Martins, director, banking supervision of CBN, made the announcement in Abuja, saying: “Further to the directive of the Central Bank of Nigeria (CBN) to all Deposit Money Banks (DMBs) to return all outstanding unremitted NNPC/NLNG foreign currency, this is to confirm that the United Bank for Africa (UBA) Plc has remitted all outstanding NNPC/NLNG deposits in its possession to NNPC’s Treasury Single Account (TSA) at the CBN.
“Accordingly, the United Bank for Africa (UBA) Plc has been re-admitted into the Foreign Exchange Market effective Thursday, August 25, 2016.”
Before the ban was reported on Tuesday, President Muhammadu Buhari had been briefed on the breach by the banks.
The banks were all mandated to move the monies to the treasury single account.
At the full implementation of the TSA in 2015, the CBN had warned that banks that did not totally comply with the TSA remission plan risked possible fine and stringent punishment.
“The CBN may take action against any FXPD that fails to comply with the standards set forth in these Guidelines. Such action will vary depending upon the type of non-compliance, but may range, for instance, from fines, suspension from any or all FX operations for a period of time to termination as an FXPD,” it had said.
All the indicted banks are barred from the forex market until they fully refund the $2.1 billion held up in their coffers
By Tobore Efe and Victoria Olisa
Spending lengthy hours on social media has a deliberating effect on the reading culture of students, and stakeholders contend that this development could lead to very poor learning outcomes.
In view of the impending unpleasant consequences, Dr. Chris Anyokwu, who teaches African Poetry, African Literature and Literary Theory, at the Department of English, University of Lagos, is calling on the National Orientation Agency (NOA), to mount sustained campaigns on the need for students to develop a strong bond with their books, and also make conscious efforts to imbibe reading culture, while scaling down on the number of productive hours spent on social media.
The university teacher who spoke during the second edition of Reading Café, which took place at the University of Lagos, maintained that social media has negatively affected the intellectual ability of youths.
“Internet poses a threat to our students, as they no longer read novels, playlets, and poems in the traditional media i.e. the book form. They do not enjoy the synchro of the page any more. They prefer to go online, not to read the e-copy of these books, but they are more interested in the snippets, summaries or spark notes than reading than whole book …”
Speaking in the same vein, Editor-in-Chief, Dunamis Publication Limited, Mrs. Lechi Eke, explained that the initiative behind Reading Café was to reawaken “reading culture among Nigerians because youths are increasingly being caught up in the Internet, phone and technology, and reading culture is gradually dying out… So, we want to revive it, stir it up in youths to go back to reading to the extent that even when they buy snacks wrapped in old newspapers, they would read the wrap in order to have an idea of what had gone past.
The writer who said that just that act of reading might stir up an interest to write something along that line, or any topic, added that, “Social media poses a threat not only to students, but to everyone, as it is time-consuming. Everyone should have interest in reading, as no one can be a good writer without reading.
In an interview with The Guardian on the sidelines of the programme, former provost, Nigerian Institute of Journalism (NIJ), Dr. Elizabeth Ikem, urged participants to “read as wide as you can and practice writing frequently because writing is not what you acquire overnight.
Ikem, who said that a “good reader makes a good writer,” added, “Decide the type of writing you want to go into either as a poet, novelist or biographer. Writing is not a field you get immediate gratification, but I believe with time, the value of creative works will begin to gain ground. That means reading culture also has to improve. My concern is for the younger generation as these days, sights and sound has taken over the serenity that goes with reading. People don’t want to read but want to watch television. Reading involves engaging your mind and intellect.”