Oil prices were down on Friday as investors considered an expected rise in OPEC+ supply starting in October and a more modest US interest rate cut in September, following data showing strong consumer spending. This came despite oilfield closures in Libya.
On the same day, Libya’s National Oil Corporation said that recent oilfield closures have led to approximately a 63% drop in the country’s total oil production, as a conflict between rival eastern and western factions continues. However, it appears that OPEC+ may proceed with a planned oil output hike from October as eight OPEC+ members are scheduled to boost output by 180,000 barrels per day in October. This is part of a plan to begin unwinding their recent output cuts of 2.2 million bpd while keeping other cuts in place until the end of 2025.
Oil prices fell to their weakest levels this year on Tuesday, wiping out all of this year’s gains, after a prospective deal to restore supplies from Libya appeared to be on the cards. According to Bloomberg News, Sadiq Al-Kabir, the governor whose attempted dismissal by the nation’s western government prompted eastern authorities to cut crude production, on Tuesday said there were “strong” indications political factions are nearing an agreement to overcome the current deadlock. The returning output would come just as the market is focused on OPEC+ increased production of 180,000 bpd within the next few weeks. Oil prices are also being driven down by ongoing concerns around demand in China given its weakening economy as well as uncertainty around the state of the US economy. Geopolitical concerns including ongoing tensions in the Middle East and some short-term supply worries have been supportive.
In Nigeria, the much-anticipated Dangote Refinery is set to begin operations, marking a significant milestone in the country’s oil and gas sector. The refinery, which is one of the largest in Africa, is expected to enhance local refining capacity, reduce dependency on imported petroleum products, and potentially stabilise fuel prices in the long term.
However, despite this development, the Nigerian National Petroleum Company Limited (NNPCL) has recently announced a substantial increase in fuel prices, raising the cost per litre from about N598 to N897.
The dual developments of the Dangote Refinery’s launch and the NNPCL’s price adjustment highlight the complex dynamics of Nigeria’s energy sector. While the refinery’s operations may offer long-term benefits, the immediate impact of the price hike is likely to strain household budgets and increase the cost of transportation and goods, affecting millions of Niger
Oil prices were down on Friday as investors considered an expected rise in OPEC+ supply starting in October and a more modest US interest rate cut in September, following data showing strong consumer spending. This came despite oilfield closures in Libya.
On the same day, Libya’s National Oil Corporation said that recent oilfield closures have led to approximately a 63% drop in the country’s total oil production, as a conflict between rival eastern and western factions continues. However, it appears that OPEC+ may proceed with a planned oil output hike from October as eight OPEC+ members are scheduled to boost output by 180,000 barrels per day in October. This is part of a plan to begin unwinding their recent output cuts of 2.2 million bpd while keeping other cuts in place until the end of 2025.
Oil prices fell to their weakest levels this year on Tuesday, wiping out all of this year’s gains, after a prospective deal to restore supplies from Libya appeared to be on the cards. According to Bloomberg News, Sadiq Al-Kabir, the governor whose attempted dismissal by the nation’s western government prompted eastern authorities to cut crude production, on Tuesday said there were “strong” indications political factions are nearing an agreement to overcome the current deadlock. The returning output would come just as the market is focused on OPEC+ increased production of 180,000 bpd within the next few weeks. Oil prices are also being driven down by ongoing concerns around demand in China given its weakening economy as well as uncertainty around the state of the US economy. Geopolitical concerns including ongoing tensions in the Middle East and some short-term supply worries have been supportive.
In Nigeria, the much-anticipated Dangote Refinery is set to begin operations, marking a significant milestone in the country’s oil and gas sector. The refinery, which is one of the largest in Africa, is expected to enhance local refining capacity, reduce dependency on imported petroleum products, and potentially stabilise fuel prices in the long term.
However, despite this development, the Nigerian National Petroleum Company Limited (NNPCL) has recently announced a substantial increase in fuel prices, raising the cost per litre from about N598 to N897.
The dual developments of the Dangote Refinery’s launch and the NNPCL’s price adjustment highlight the complex dynamics of Nigeria’s energy sector. While the refinery’s operations may offer long-term benefits, the immediate impact of the price hike is likely to strain household budgets and increase the cost of transportation and goods, affecting millions of Nigerains.ians.
Dencun Upgrade on Ethereum Layer-1 Network Revenue
Before we dive in, what is the Dencun upgrade about? The Dencun upgrade is an Ethereum network upgrade aimed at improving scalability and reducing transaction costs, particularly for layer-2 solutions. The Dencun Upgrade process include:
1. Pre-Upgrade Fee Levels: Ethereum layer-1 network fees reached $35.5 million on March 5, 2024, driven by high demand and activity.
2. Dencun Upgrade: Implemented on March 13, 2024, the Dencun upgrade was designed to significantly lower transaction fees for layer-2 solutions, which operate off the main Ethereum chain, but rely on layer-1 for security and settlement.
3. Shift in Activity: The reduction in layer-2 transaction costs led users and developers to migrate their activities from layer-1 to layer-2 solutions, causing a dramatic decrease in layer-1 transaction volume and a corresponding drop in revenue.
4. Fee Trends Post-Upgrade: – By August 31, 2024, layer-1 fees had fallen to $566,000, a 99% decrease from pre-upgrade levels. – A slight increase to $578,000 by September 2, 2024, suggests a minor uptick in layer-1 activity, though fees remain significantly lower than before the upgrade.
5. Layer-2 Ecosystem Growth: Increased transaction volumes on layer-2 platforms highlight their role in managing the majority of Ethereum’s transactional load, aligning with Ethereum’s strategy to enhance scalability and reduce costs.
In summary, the Dencun upgrade has led to a substantial decline in Ethereum layer-1 network fees and a shift in transaction activity to layer-2 solutions. This transition underscores the effectiveness of layer-2 technologies in scaling Ethereum’s network and optimising cost-efficiency, while also impacting the revenue model for the Ethereum base layer.
Whilst the Dencun upgrade might be to blame for the decline in Ethereum’s revenue, there is also the political aspect.
Since former President Donald Trump declared that he would support cryptocurrencies in the United States and even had elites like the Winklevoss twins donate a million Dollars each to his campaign, there has been a steady decline in the entire market capital of cryptos. His opponents seem to be doing everything in their power to drive down prices to belittle cryptocurrencies and the technology behind them. They are unable to drive down prices as effectively as they used to in the past because there is now a worldwide adoption of cryptocurrencies and the blockchain, albeit slow.
It is probably safe to say that until the American presidential elections are over, Bitcoin is likely to decline to the $42,000 levels. If Kamala wins the election, there might be some turbulence and downturn in the market as she has declared against it, but she might be making a 360 to get more votes.
Overall, this situation clearly shows the strength of the American crypto adopters in swaying the market. However, crypto enthusiasts are grateful that they no longer hold as much power in the market as they did previously as there is the entire continent of Asia and countries like the UAE and Malta.
