Nigeria Grapples With End To Rapid Growth

Nigeria is becoming a symbol of how quickly and far the declining price of crude oil has dragged emerging markets down, Drew Hinshaw and Joe Parkinson report. The stock market in Africa’s top economy fell almost 3% Monday on news that MSCI is considering removing the country from its benchmark frontier markets index.

DWINDLING OIL REVENUE PUTS BRAKES ON AFRICA’S TOP ECONOMY

Nigeria is becoming a symbol of how quickly and far the declining price of crude oil has dragged emerging markets down, Drew Hinshaw and Joe Parkinson report. The stock market in Africa’s top economy fell almost 3% Monday on news that MSCI is considering removing the country from its benchmark frontier markets index. Months of falling oil revenue also have prompted a scarcity of dollars as the government hoards foreign currency to safeguard shrinking reserves. Revenue took another hit when saboteurs went underwater to break open a pipeline that carries 130,000 barrels of crude a day. The World Bank said Nigeria’s economic growth slid to 2.8% last year from 6.3% the year before, and the International Monetary Fund says this year’s growth will slip to 2.3%.

MARATHON TO SELL $870 MILLION IN WYOMING ASSETS

Marathon Oil Corp. will sell its Wyoming upstream and midstream assets for $870 million, as the oil company follows up on saying it would increase its target for noncore-asset sales as part of a goal of “living within our means,” Josh Beckerman reports. The Wyoming transaction and other deals announced Monday totaled $950 million, putting Marathon ahead of its revised target with about $1.3 billion of sale agreements since last year. Chesapeake Energy Corp., meanwhile, said it reached an amended agreement with its lenders that affirmed the energy company’s revolving credit facility at $4 billion, but expanded the collateral backing the debt to include most of the company’s assets, Tess Stynes reports. The Oklahoma City energy company, co-founded by the late Aubrey McClendon, has been working to shore up its balance sheet as commodity prices remain low. National Oilwell Varco Inc. slashed its dividend by 89% as the maker of drilling equipment and provider of oil-field services moved to preserve capital amid the low oil prices, Austen Hufford reports. Which oil and gas producers are cutting and by how much remains a key concern as first-quarter results approach, Helen Thomas writes. When big banks announce earnings starting on Wednesday, the spotlight will be on massive energy loans, Rachel Louise Ensign reports. While there seem to be reasons for a little confidence about stabilizing commodity prices, conditions for rising prices are still not fully apparent, Reuters writes.

BRAZIL COMMITTEE VOTES TO RECOMMEND PRESIDENT IMPEACHMENT

A Brazilian congressional impeachment committee voted to recommend a Senate trial for President Dilma Rousseff on charges of manipulating public finances ahead of a decision this weekend by the entire lower house of congress, Paulo Trevisani and Luciana Magalhaes report. The panel voted 38-27 to approve a report recommending impeachment. If two-thirds of the full Chamber of Deputies supports impeachment, the case will move to the Senate for a trial. The president also has been damaged by a corruption probe centered on state oil company Petróleo Brasileiro SA.

MARKETS

Oil prices rose in volatile trade Tuesday after the dollar slumped, but the market remains on edge in response to uncertainty over an output cut by major producers. Brent crude, the global oil benchmark, rose 1% to $43.24 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.7% at $40.63 a barrel. The U.S. oil benchmark settled above $40 a barrel for the first time in three weeks on Monday, while Brent touched a four-month high.
“Dollar weakness and a generally positive sentiment toward commodities took oil prices higher,” said analysts at PVM brokerage.

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