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Crude Oil: A Sudden Tumble

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The major headline-catching storyline throughout the latter half of 2014 and even the opening week of 2015 has been the dramatic plummet in oil prices, with Crude having declined by around 50% since last June.

Concerns over an oversupply of oil in the markets encouraged bearish pressure, while heightened anxiety over global economic health inspired fears that there would be less demand for the commodity and further elevated anxiety regarding there being an oversupply in the markets.

This encouraged further downside movement, while the OPEC decision not to cut production last November went on to inspire the commodity to conclude the year around five-year lows.

There was some optimism that the oil markets had found a floor when the selling paused around Christmas, but it was always expected that this was just a small consolidation while traders took a break over the holiday.

I was also curious that the consolidation could have been a preparation for the next leg lower, which proved to be the case.

As 2015 has commenced, the decline in oil prices has resumed with Crude already losing a further $5 from its valuation.

Traders have become increasingly aware regarding the current economic conditions being strictly against the commodity, where the heavily-weighted supply and demand equation has only had one outcome: further declines for oil and economic conditions so heavily against a comeback that even the most risky of investors are being eliminated from considering purchasing.

Despite the bears completely dominating and squeezing as much as they can to squash prices, there remains optimism that Crude can rebound back towards $70.

I question the potential for this because the OPEC decision not to cut production in November basically suggested that the committee group were no longer in control of the oil markets, and confirmed a longer-term bearish outlook for oil.

A rebound would be dependent on OPEC reversing its decision against cutting production and with prices already crashing down below $50, this appears unlikely as well. Could OPEC reverse its decision in the future? Perhaps.

However, traders will continue to price in as many declines as possible beforehand. Furthermore, oil inventories are increasing on what appears to be a weekly basis and it would require a significant cut in production, otherwise inventories will just creep back up to the same levels where there is another oversupply.

Additionally a rebound would also likely be dependent on increased demand for the commodity but with global economic health concerns being so elevated, this is hard to envisage.

It appears highly likely that global growth concerns will continue throughout the first quarter in 2015.

This would more likely lead to further anxiety over reduced demand for the commodity, and encourage bearish pressure.

Economic data from China is also highly important, due to the world’s second-largest economy being the largest importer of oil. It is no coincidence at all that in the hours following China’s worst PMI manufacturing decline of the year, pressure resumed in the oil markets.

It is also worth noting that Crude is priced in USD and towards the middle of 2015, the overwhelming majority expect the Federal Reserve to begin raising US interest rates.

This will lead to an aggressive USD rally, while spelling further bad news for commodities and metals.

The Fed raising rates will pressure Crude and as long as the Fed raises rates as planned towards the middle of next year, the commodity will face a further downside risk.

Overall, there are just so many economic conditions being against a comeback that it makes it difficult to believe one will happen anytime soon.

Can it happen? Sure.

However, it is going to require a combination of greatly reduced concerns over an oversupply in the markets, and global economic optimism raising demand, for oil to wake up the bulls. Getting these two factors to collaborate at the same time might also be tricky.

The technicals currently paint an extremely depressing picture for Crude Oil, to the point where the price has tumbled so rapidly that no technical patterns can even be found.

We have already crashed through psychological support around $70, $63, $57, $52 and $47.

The $42 area is widely seen as the next big test and if we extend below here, it is going to require some time for the prices to even find a floor, let alone any type of rebound back towards $70.

Jameel Ahmad is the chief market analyst at Forex Time (FXTM).


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FG Drops Merger of NCAA, NAMA

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The Minister of Aviation and Aerospace Development, Festus Keyamo has disclosed that President Bola Tinubu has stepped down the merger of the Nigeria Civil Aviation Authority (NCAA) and the Nigerian Airspace Management Agency (NAMA) as recommended by the Steve Oronsaye report.

He also revealed that the aviation industry was exempted from the foreign travel ban placed on federal government officials last year. The President announced the ban which took effect from April last year.

Keyamo disclosed that the aviation sector was exempted from the ban because President Tinubu is desirous of change and growth in the sector.

The ban was placed following the rising cost of travel expenses by Ministries, Department and Agencies of Government.

The memo released last year stated: “Considering the current economic challenges and the need for responsible fiscal management, I am writing to communicate Mr Presideni’s directive to place a temporary ban on all publicly funded international trips for all federal government officials at all levels, for an initial period of three months from 1st April 2024.

“All government officials who intend to go on any publicly funded international trips must seek and obtain Presidential approval at least two weeks before embarking on any such trip, which must be deemed necessary”.

The Minister disclosed the reasons for the exemption in Abuja at the 25th anniversary celebration of the Nigeria Civil Aviation Authority (NCAA).

On the merger of NCAA and NAMA, he said: “From modest beginnings, we have witnessed remarkable transformations in our sector, ranging from enhanced supervisory measures and policies formulation, safety and security oversight, robust legislative and regulatory frameworks, advancements in air traffic management, development, expansion and certification of airports, accurate meteorological services, timely accident investigations, manpower development, and indeed, the growth of indigenous airlines.

“These achievements have not come without challenges. However, with the efforts of past administrations and the total support of the present administration under the dynamic leadership of His Excellency President Bola Tinubu through the Renewed Hope Agenda and the five focus areas of the ministry, we have overcome challenges and reached new heights.

“NCAA is a child of God, and despite turbulent waters and attempts sometimes to kill the NCAA, the NCA has survived 25 years. And I’m sure you know that any child that is born at the age of 25, of course, is undoubtedly an age of maturity.

“The Oronsanye reports also recommended the merger of NCAA and NAMA. And so that was also another attempt to kill the NCAA. That report was passed from Jonathan’s government to Buhari’s government, and then to the present government.

“It was one of the first items we considered in this government. So the Oronsanye reports came up that day, and the president went on and on, considered every item in the Oronsanye report, and asked the council to vote. And for each item, they would listen to the ministers and so the president came to the merger of NCAA and NAMA as one body.

“I raised my hand, I spoke for about five minutes and because we have a wonderful president who listens to good counsel and good arguments, after I finished speaking, he said, an item dropped, the merger of NCAA and NAMA would not remain”.

On the reasons for the exemption, he said: “It is a fact that the aviation sector remains a pillar of national development, facilitating trade, tourism, investment, and cultural exchange. Whilst it is yet to realize its true potential in terms of contribution to our nation’s Gross Domestic Product (GDP), we must renew our commitment to ensuring a more progressive, sustainable, inclusive, innovative, and prosperous aviation industry.

“This necessitates the continuous adoption and integration of emerging technologies, enhancing infrastructure, and investing in human capital development to keep our skies safer and secure and attain cohesive and efficient air transportation services.

“The President directed that foreign travels should stop, except in exceptional circumstances. Last year, there was a memo around March that said it was for three months, and the President, because of his desire to ensure that we are frugal in our spending; there was another memo again in December reiterating that memo last year we should cut down on foreign travels, except by direct presidential approval.

“But let us also give particular thanks to Mr. President, because despite that memo, since last year, he has made an exception for the aviation industry. I wrote a memo to him after that directive on behalf of the entire agency that says; Sir, we respect your directive; yes, we need to be frugal because the Nigerian people have also tightened their belts in the face of the economic reforms that are taking place.

“However, because of the safety of this sector, Sir, we need to make some exceptions for this sector. And the President graciously granted this for the aviation sector”.


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Researchers Develop Innovative Treatment for Malaria

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An international team of researchers have introduced a groundbreaking drug, known as the covalent kinase inhibitor, which shows promise in combating treatment-resistant malaria.

Researchers Develop Innovative Treatment for Malaria

Developed by chemists and bioscientists from the University of Glasgow, this innovative drug could surpass current medications by effectively targeting and disabling the proteins used by the Plasmodium falciparum parasite to replicate within the human body.

This is according to a report titled “Targeting Pf CLK3 with Covalent Inhibitors: A Novel Strategy for Malaria Treatment.”

The development, led by chemists and bioscientists from the University of Glasgow, was outlined in a November publication in the “Journal of Medicinal Chemistry.”

According to the researchers, covalent inhibitors form bonds with proteins, usually irreversibly modifying them, and this new drug could be more effective than current medications at all stages of malaria infection.

The new drug works by permanently disabling a protein that Plasmodium falciparum, one of the mosquito-borne parasites that spread malaria, uses to replicate itself inside the human body.

The drug also has the potential to work as a single-dose treatment, a significant improvement over existing therapies.

This breakthrough marks the first adaptation of an approach from cancer treatments to tackle malaria.

The team expressed optimism that the parasite is unlikely to develop resistance to the new drug, which targets the protein Pf CLK3 and disrupts the parasite’s ability to splice RNA.

The researchers, including Prof. Martins Emeje from the Nigerian Natural Medicines Development Agency and Prof. Oyewale Tomori from the West African Academy of Sciences, emphasise the importance of regular calibration and accreditation for medical laboratories to ensure accurate results and reliable treatment.

 

 


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Nigeria to Host ICEGOV 2025, A Milestone in Digital Governance and Global Leadership

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The Federal Ministry of Communications, Innovation & Digital Economy, Nigeria has been officially confirmed as the host country for the 2025 International Conference on Theory and Practice of Electronic Governance (ICEGOV) edition.

This confirmation by the United Nations University Operating Unit on Policy-Driven Electronic Governance (UNU-EGOV) marks a historic milestone in our nation’s digital transformation journey, showcasing Nigeria’s leadership in digital governance, innovation, and technological advancements on the global stage.

ICEGOV is a prestigious global conference that convenes governments, academia, international organisations, industry leaders, and civil society to exchange insights, research, and best practices in electronic governance.

Hosting this event presents a unique opportunity to strengthen Nigeria’s digital ecosystem, foster multidisciplinary collaborations, and drive policy innovations that will shape the future of governance in Africa and beyond.

Speaking on this momentous achievement, the Honourable Minister of Communications, Innovation & Digital Economy, Dr. ‘Bosun Tijani, stated: “Nigeria’s selection to host ICEGOV 2025 is a recognition of our efforts to drive digital transformation and innovation in governance.

“I am a firm believer in the importance of the academia and research in supporting global discussions on e-Governance and we have seen this in some of the input in government initiatives like the National AI Strategy and the National Digital Economy and e-Governance Bill which are laying the foundation for the growth of Nigeria’s Digital Economy.

“As we prepare to welcome you all to Nigeria, we look forward to very useful outcomes that will be beneficial for the growth of digital governance and policy development globally.”


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