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By TAYO ELEGBEDE
Following the disclosure of a build of 4.9 million barrels for the week to July 17 in crude oil inventories by the Energy Information Administration(EIA), oil prices have again dropped on Thursday.
The EIA noted that inventories were 19 percent above the seasonal average at 536.6 million barrels, meaning demand has continued to be on the downside.
This development comes after market analysts speculated last week that the EIA would report a crude decline of 1.95-million-barrel inventory because forecasts were that demand will rise as countries begin to ease down lockdown from the Covid-19 pandemic.
Indications are that the new wave of the corona virus in some states in America has caused fears in the oil market , which has cancelled the demand boost from what was expected days back.
The American Petroleum Institute (API) has also reported yesterday that there was an inventory increase of 7.544 million barrels, which came as not so shocking to market observers and also affecting prices.
West Texas Intermediate (WTI) recorded a decline of 0.33 per cent Thursday afternoon at 14:05 GMT, and sold for $41.70 per barrell as compared to yesterday’s price of $42.00.
While Brent crude traded at $43.89, with a loss of 0.98 per cent from the previous day price of $44.36, and Bonny light selling for $43.63 per barrel, after a drop of 2.39 per cent.
However, Barclays bank had today warned of a price correction in case of slowing demand, expecting Brent Crude to average $41 a barrel and WTI Crude to average $37 per barrel this year.
But the bank was optimistic that next year forecasts are that Brent will record an average of $53 and WTI to average $50 a barrel.
“The fact that we have had a resurgence in Covid-19 cases across a number of states in the US has not helped the demand recovery, with some states tightening restrictions once again,” they said.
ELEGBEDE TAYO OREDOLA , a journalist with five years professional experience is self motivated and a team player. Her experience came from diverse media, like The Guardian Newspaper, Radio Nigeria among others and now with the INSIDEBUSINESS in the bid to explore the new media.
Email: [email protected]
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