After days of debating, OPEC and its allies, led by Russia, agreed at the weekend to reduce oil output by 9.7 million barrels per day for the months of May and June. The cuts represent about 10 per cent of global supply and is intended to help crude prices to rebound.
However, the gains of a possible increased in the prices of crude evaporated amid concerns that the output cuts will not be enough to head off oversupply, with the Coronavirus pandemic still hammering demand.
Brent crude fell by 0.50$, or 1.70 per cent, to $30.91 a barrel by 9.12 am local time after opening at a session high of $33.99. U.S. West Texas Intermediate (WTI) was up at $0.78, or 0.39 per cent, to $22.81 a barrel, after hitting a high of $24.74.
Still, global demand concerns erased oil price gains from the Asian trading session. Global crude oil consumption has dropped by about 30 per cent, due to the COVID-19 outbreak that has killed over 100,000 people globally and kept businesses shut.
Rallying from the immediate dip that happened after the historic production cut deal between the Organisation of Petroleum Exporting Companies (OPEC) and its Russia-led allies, oil prices inched up early Monday morning, signaling improving market confidence.
As of 08:12 West African Time Monday morning, Nigeria’s Bonny Light was trading at $26.40 per barrel up by 1.97 per cent, Brass River at $27.33 down by 2.25 per cent, and Qua Iboe at $27.33 down by 2.25 per cent.
ut differently, all of Nigeria’s oil grades are selling below government’s new oil benchmark for the 2020 budget, which is $30 per barrel.
Meanwhile operators in the downstream sector have said the pump price of gasoline might fall for the third time in barely three weeks if other operators towed the path of the Nigerian National Petroleum Corporation (NNPC) to start importing the product.
The oil marketers ascribed the recent downward reviews in the price of petrol by the Petroleum Products Pricing Regulatory Agency to the slump in oil price at the international market.
