May 15 (Lagos) - Crude oil prices resumed decline after signs of peace in the middle east emerged as Iran signaled its willingness for talks with conditions. US President Trump was in Saudi Arabia and Qatar this week and obtained investments worth hundreds of billions of US Dollars into US Companies.
These deals could transform how the refineries in those Countries operate with new software from AI firms that had their CEO's travel along with US President to the middle east. What this means is that the production costs in the middle east could fall further thereby enabling higher margins with lower crude oil prices. Therefore the lower crude oil prices may not hurt economies of middle east as much as analysts were earlier projecting.
Lower crude prices could be here to stay. It could lead to lower fuel price at the pump in Nigeria if the Federal Government can get more efficient and the downstream companies can get more efficient. Nigerian economy could see some benefits but those benefits could get offset with lower forex earnings from crude oil sales. The need to diversify Nigeria's export portfolio could not be more understated.
US crude oil inventories were at elevated levels and that also pushed prices down.
Lower fuel price at the pump is a promise that President Trump has made to Americans so it should be expected that lower crude oil prices are here to stay. They could even fall further. We should not be surprised and prepare accordingly.
Brent oil price was down 3.3% to $ 63.89 per barrel and US NYMEX crude oil prices were at $60.88 per barrel at the time of writing this article.