Sep 8 (Lagos) - Crude oil prices declined due to lower demand from Asia and a build up in inventory. US crude oil futures for October delivery to $ 38.87 barrel in New York while Brent crude oil futures were hovering around the $41.81 a barrel mark in London after an almost 2% decline yesterday.
Saudi Arabia cut its prices for October delivery following a glut in supply from OPEC+ alliance. This signaled that OPEC does not see a full economic recovery from the Covid-19 pandemic.
The long weekend was also the last one for the Summer in the USA and marks the end of the period which is considered as the driving season as millions of Americans traditionally go on road trips and this leads to more oil demand.
As the long week ended, the cases of corona virus are spreading once again with Germany seeing highest infections rates since April. India is now the second most affected country in the world after USA.
Short term outlook for crude oil is looking weak and the longer term outlook is also not particularly bright given the shifting focus in the developed world towards electric vehicles especially in China and USA.
Pump price has been raised to N 162/litre in Nigeria and this is already causing inflation fears as petrol price affects price of almost everything in Nigeria. We can expect more resistance building against the price increase and that will put a pause in any economic recovery in the later part of this year.
reporting for easykobo.com on Tuesday, Sep 8 2020 from Lagos, Nigeria