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Oil prices fall, as U.S. crude storage surges, Bonny Light now $33.28

Major setback awaits Nigerian economy as more foreign oil companies prepare to exit

Oil prices extended losses early Thursday as industry statistics from the United States, the world’s biggest oil producer and consumer, reflected a rapid and dramatic increase in crude inventories, raising doubts of an easy rebound in demand as economies continue to ease coronavirus lockdowns.

The development triggered two daily losses in a row after fears emerged regarding Russia’s willingness to honour significant oil output cuts in the build-up to conference in June between member nations of the Organisation of the Petroleum Exporting Countries and its ally group, known as OPEC+.

U.S. West Texas Intermediate (WTI) crude futures had shed 4.4% or $1.44 as of 05:02 West African Time, trading at $31.37 per barrel after going down by 5% to a low of $31.14 at the earlier session.

Read also: Oil prices recede over demand uncertainty, Hong Kong conflict; Bonny Light gains $1.06

Brent crude futures dived by 3.2% or $1.10 to $33.64 per barrel.

On Wednesday, Nigeria’s Bonny Light had depressed by 2.32% or $0.79 to end the day’s trade at $33.28 a barrel.

“A surprise to consensus API (American Petroleum Institute) inventory build (data) and fear of Russia turning up production weighs on oil prices.

“As is often the case during a run-up up to an OPEC+ meeting, the focus is squarely on Russia’s commitment and understandably so as historically they have been the laggard within the OPEC+,” Chief Global Markets Strategist at AxiCorp, Stephen Innes, told Reuters.

OPEC+ will be on a lookout to see if U.S. shale oil producers will ramp up production with WTI lingering above $30 per barrel, Lachlan Shaw of National Australia Bank said.

 

Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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