Crude oil has crashed to just above $60 per barrel as it struggles to find its feet again.
Brent, against which Nigeria’s crude oil is priced, fell by $4.09 to $60.53 per barrel on Tuesday.
The slide put the brakes on four-month strong gains. A sign of flagging demand in key markets in Europe over rising COVID-19 cases and tighter lockdown restrictions.
For instance, the United Kingdom government insists that holidays abroad are still firmly off bounds and a jet-sized hole in demand remains stubbornly in place. Germany, Europe’s biggest oil consumer, is extending its lockdown until April 18 while a third of France entered a month-long lockdown on Saturday following a jump in cases in Paris and parts of northern France.
Although countries were set to reopen economies in the coming months, it seems the oil rally might have gotten ahead of itself.
However, any rise in demand is likely to be matched by rising supply as OPEC+ is set to ease production cuts and the United States shale output ramps up.
The fall in oil price could be bad news for Nigeria and good news for the citizens.
Low oil price means lesser revenue to the coffers of the Federal Government but for Nigerians, the growing fear of petrol price increase is relatively eased at the moment.