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OIL-PRICE DROP PUSHES NIGERIA INTO FIRST RECESSION SINCE 2004
Nigeria, Africa’s second-biggest oil producer, entered its first technical recession since 2004 in the second quarter, marking a symbolic end to more than a decade of robust growth that turned the nation into the continent’s largest economy.
The 2.1% contraction in gross domestic product from a year earlier, reported by the country’s statistics authority Wednesday, follows a 0.4% annual decline in the first three months of the year, meeting the shorthand definition of a recession as two consecutive quarters of economic contraction.
The most violent hit to the economy came from the oil sector, where income plummeted by more than 17% from a year earlier.
Nigeria’s struggle with the global oil-price decline has been compounded by an insurgency in its petroleum-rich south, where militants calling themselves the Niger Delta Avengers have been blowing up pipelines and sabotaging wells.
The escalating attacks contributed to a drop in oil production, which sank to an estimated 1.69 million barrels of oil a day between April and June, according to the statistics office. That is 420,000 barrels lower than in the first quarter and 360,000 barrels below daily production in the second quarter of 2015.
PAKISTAN BATTLES ENERGY SHORTAGE WITH FLOATING LNG TERMINAL
Pakistan is taking on its acute energy shortage by dramatically ramping up imports of liquefied natural gas, while undertaking the longer-term goal of upgrading its energy infrastructure with new pipelines, refineries and storage facilities, reports Sarah Mcfarlane
The country of nearly 200 million people has long suffered from a lack of investment in its energy sector, causing hours of rolling supply cuts to homes and businesses daily.
The country kick-started LNG imports in 2015, with Pakistani petrochemical and energy company Engro Corp. leasing a floating import terminal, stationed in Karachi’s Port Qasim from where gas is piped into Pakistan’s local distribution system. A second terminal is planned for mid-2017.
Meanwhile, natural gas prices ticked up Wednesday, reversing course after two days of losses as a storm brewing in the Gulf of Mexico continued to strengthen, reports Alison Sider.
Tropical Storm Hermine gained strength Wednesday as it headed toward Florida, and the National Hurricane Center said it is poised to be near hurricane strength by the time it makes landfall.
While the storm appears to be moving away from natural gas production and pipelines further west in the Gulf of Mexico, the Bureau of Safety and Environmental Enforcement said Wednesday that companies have shut some 10.59% of natural gas production in Gulf waters.
ELON MUSK FACES CASH SQUEEZE AT TESLA, SOLARCITY
Two pillars of Elon Musk’s empire are facing financial crunches as the entrepreneur seeks to combine the two companies through a controversial acquisition, reports The Wall Street Journal.
Tesla Motors Inc. filed a registration document with the Securities and Exchange Commission Wednesday in relation to its proposed merger with SolarCity Corp.
The Palo Alto, Calif.-based company, which makes electric cars, disclosed that it has to pay $422 million to its bondholders in the third quarter, and that it will raise additional money by the end of the year.
Mr. Musk, the chairman of SolarCity and Tesla, has said the merger will save money and laid out plans for a more diverse company focused on batteries, solar energy, automobiles and heavier vehicles.
The merger, subject to shareholder approval and expected to close by the end of the year, is valued at $2.4 billion based on the most recent financial data.
MARKETS
Oil prices continued to fall Thursday, after an initial rebound faded amid expectations of a stronger dollar and continued concerns over the mismatch in crude’s supply and demand.
The November contract for global crude benchmark Brent was down 0.45% to $46.68 a barrel on ICE Futures Europe, while the price for October deliveries of its U.S. counterpart West Texas Intermediate fell 0.2% to $44.61 a barrel on the New York Mercantile Exchange.
The declines extended Wednesday’s steeper drops, which had taken both benchmarks to multi-week lows on the back of strong U.S. inventory levels.
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