Nov 8 (Lagos) - Crude oil prices declined more than 4% as concerns emerged regarding reduction in demand from China and India, the biggest crude oil consumers and growing inventories in the USA. Markets are willing to look past the middle east war which is now more than 1 month old. The supply coming out of Russia is at a four month high so there is plenty of supply despite production cuts by Saudi and Russia.
West Texas Intermediate was lower by 4.29% at $77.35 per barrel while Brent crude futures also tanked 4.19% to $81.60 per barrel at the time of writing this article.
The US recently had a deal with Venezuela to start supplying Crude oil after many years of sanctions on the South American nation. That deal means there is more supply in the world and less pressure at the pump for American consumers. The US Government is desperate to control inflation as it approaches an election year in 2024 and the ratings of the current administration are at an all time low. So they are willing to do business with a Country they placed sanctions upon back in the day.
For Nigeria, the reduction is crude oil price could benefit the government as it may ease some pressure on imports because at the end of the day Nigeria imports petroleum products and removal of subsidy means that crude oil prices dictate what price consumers will pay at the pump. On the flip side, it negatively impacts Nigeria's crude oil sales which earns precious US Dollars that are needed by the CBN to get us out of a quagmire of forex inflicted economic destruction of the economy over the past 8 years.
reporting for easykobo.com on Wednesday, November 8 2023 from Lagos, Nigeria