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Oil prices fall further over virus rise scare, Bonny Light loses 1.57%

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

Oil prices edged lower on Monday towards $40 per barrel on Monday as coronavirus infections leapt across the world even though investors expressed measured optimism regarding current talks over a stimulus package for the European Union to resurrect economies battered by the pandemic outbreak.

Brent crude declined by 38 cents or 0.88% to $42.76 a barrel at 11:51 West Africa Time just as the United States’ West Texas Intermediate (WTI) slid by 39 cents or 0.96% to $40.20.

Nigeria’s banner oil grade, Bonny Light, fell by 69 cents or 1.57% to $43.17 at the last session while another national offering, Qua Iboe fell 53 cents or 1.21% to $43.28 per barrel.

Bjornar Tonhaugen, Head Oil Markets at Rystad Energy, said “as things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down. And even though in Europe the virus has been cornered, the Americas and some Asian states have still a long way to go.”

Over 14.5 million coronavirus cases have been reported across the world while the death toll exceeds 604,000 according to a Reuters tally.

Investors are awaiting the outcome of the EU summit for trading cues, with leaders demonstrating signs of compromise over carving up a planned 750 billion euro ($858.30 billion) stimulus fund to reinvigorating economies.

Read also: Oil prices slide after OPEC+ agrees to ease output curbs, Bonny Light gains

Japan’s oil imports crumbled by 14.7% in June from the same month a year earlier, official figures revealed on Monday. The fall was not as significant as in May when they plunged by a quarter year on year.

Also reinforcing the impact of the pandemic, Japan’s exports slumped 26.2% in June from a year earlier, finance ministry statistics showed on Monday.

Although fuel demand has improved from a 30% dive in April after nations around the world imposed lockdowns and placed bar on trade, usage still lies below pre-pandemic levels.

US retail gasoline demand is dropping again as cases surge.

“We recognise that further improvements in demand will be difficult to achieve, but also do not expect a return to April and May lows,” JBC said in a note.

The escalating rift between China and the U.S. equally pressured oil prices.

China’s embassy in Myanmar on Sunday alleged the U.S. maliciously smeared the country and causing animosity between it and its Southeast Asian neighbours concerning the disputed South China Sea and Hong Kong.

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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