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Oil Price Drops Below $60 over US, China Trade Tensions
•NNPC seeks military support for exploratory activities in Chad Basin
Ejiofor Alike with agency reports
Escalating trade tension between China and the United States continued its negative impact on crude oil price yesterday as the value of the priced commodity, which has lost nine per cent in the past one week, dropped to around seven-month low below $60.
This is coming as the Nigerian National Petroleum Corporation (NNPC) has expressed its preparedness to resume full operations at the Chad Basin, Gongola and Benue Trough, as it seeks for holistic military supports for the protection of its workforce and high-tech equipment.
The price of global benchmark crude, Brent, lost more than nine per cent in the past week, with the US President Donald Trump vowing to impose new tariffs on Chinese imports and China making further moves against US agricultural cargoes.
The United States also responded to a decline in China’s Yuan on Monday by branding the country a currency manipulator, pushing China to accuse the US of causing chaos in financial markets.
International benchmark Brent yesterday slumped to $59.07, its lowest since January 14 before rebounding slightly to $60.05 per barrel.
West Texas Intermediate crude futures rose 35 cents to $55.04 per barrel.
Reuters reported that the global equities hit a two-month low and Brent fell more than three per cent on Monday as traders worried the dispute between the world’s two biggest oil buyers would dent demand, helping to prompt yesterday’s short-covering.
London’s main stock market index dropped for a sixth straight session yesterday.
On the supply side, Iran has threatened to block all energy exports out of the Strait of Hormuz, through which a fifth of global oil traffic passes, if it is unable to sell oil as promised by a 2015 nuclear deal in exchange for curbing uranium enrichment.
Britain on Monday joined the US in a maritime security mission in the Gulf to protect merchant vessels after Iran seized a British-flagged vessel.
Meanwhile, NNPC has expressed its preparedness to resume full operations at the Chad Basin, Gongola and Benue Trough as it seeks holistic military supports for the protection of its workforce and high-tech equipment.
Group Managing Director of the corporation, Mallam Mele Kyari, made this submission yesterday in Abuja when he led top management of the NNPC on a visit to the Chief of Defence Staff, General Gabriel Olonisakin.
A statement by NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, stated that due to the security challenges in the Chad Basin, Gongola and Benue Trough, the NNPC had not been able to mobilise fully to those areas of its important operations.
Mele Kyari said: “I am visiting the Chief of Defence Staff as my first port of call following my appointment to seek the support of the armed forces to help the NNPC in re-entering the Chad Basin, Gongola and Benue Trough to enable us to carry out our mandate for national development. Your support in terms of providing full security for staff and equipment is critical to us.”
He added that the corporation equally required the military to intensify efforts in the protection of NNPC’s pipelines and Right of Way (RoW) across the nooks and crannies of Nigeria.
He said NNPC was seriously challenged due to the nefarious activities of pipeline vandals, petroleum products thieves and other economic saboteurs that breach the operations of the corporation in various parts of the country.
Responding, Olonisakin, described the NNPC as a strategic corporation that would be given full military support to enable it to deliver on its mandate to the people.
“It is imperative for the armed forces and the NNPC to collaborate and synergise for the benefit of the country going by their various strategic roles to the nation. The armed forces operations, code named: Operation Wase and Operations Delta Safe, along with other operations, were geared towards protecting pipelines and various oil and gas facilities,” Olonisakin said.
According to him, the military and the NNPC have been working together and the visit of the GMD would further bolster the various operations to secure the oil and gas installations, adding that the military has devised several strategies to stem pipeline vandalism in the country.
