OIL PRICE ECONOMIC GLOOM TO PERSIST
Oil Price: Economic Gloom
To Persist – World Energy
Report
The International Energy Agency (IEA), in
its November report, has predicted that
the economic downturn plaguing Nigeria
and some other countries as a result of
the massive tumble in the global price of
crude oil would have to persist, even all
through 2016.
The doomsday prediction is scarier for
Nigeria, which operates a mono economy
that is dependent on oil.
From a global demand of 1.8million
barrels per day (mb/pd) in 2015, IEA, in
the report released on Friday, said the
demand for oil would plummet to an
abysmal 1.2 mb/pd by next year. This
weak demand, the agency says, would be
worsened by oversupply in the world
market from both OPEC and non-OPEC
countries- a situation that can see a
country such as Nigeria, not finding any
buyer for its crude oil in the global
market.
At the moment, the oil glut has seen to a
1.6million barrel supply surplus in the oil
market in the past two years, whereas
the optimal world consumption is
benchmarked at 97mb/pd. The global
energy agency observes that while there
has been a decline in supply from
countries such as Iraq and Kuwait, other
oil producing nations such as Saudi
Arabia, Nigeria and Libya have ensured
that supply continuously outweighed
demand. The IEA breaks down the
surplus to translate to 710,000 barrels
per day in this last quarter of 2015,
which it observes outstrips that of any
other quarter, since the free fall of global
oil price began in 2014; and higher than
any other quarterly surplus in the last 10
years.
Currently, a lowly $44 per barrel is what
crude oil goes for in the international
market. Rather than move up, global
industry watchers as well as the IEA
report establish that the price would
further go downhill. As recently as June
2014, oil price reached a premium of
$101 pb, but by December same year,
crashed to $52 pb.
Price volatility is traditional with oil in the
global market. In 2008, oil price climbed
to $140 pb, all-time high, but by the last
quarter of same year, tumbled down to
$40 pb. The degree of the December,
2008 oil price crash and that of
December 2014, are characterised by
global industry watchers as the biggest
drops in oil prices, within a year, since
80s.
To Persist – World Energy
Report
The International Energy Agency (IEA), in
its November report, has predicted that
the economic downturn plaguing Nigeria
and some other countries as a result of
the massive tumble in the global price of
crude oil would have to persist, even all
through 2016.
The doomsday prediction is scarier for
Nigeria, which operates a mono economy
that is dependent on oil.
From a global demand of 1.8million
barrels per day (mb/pd) in 2015, IEA, in
the report released on Friday, said the
demand for oil would plummet to an
abysmal 1.2 mb/pd by next year. This
weak demand, the agency says, would be
worsened by oversupply in the world
market from both OPEC and non-OPEC
countries- a situation that can see a
country such as Nigeria, not finding any
buyer for its crude oil in the global
market.
At the moment, the oil glut has seen to a
1.6million barrel supply surplus in the oil
market in the past two years, whereas
the optimal world consumption is
benchmarked at 97mb/pd. The global
energy agency observes that while there
has been a decline in supply from
countries such as Iraq and Kuwait, other
oil producing nations such as Saudi
Arabia, Nigeria and Libya have ensured
that supply continuously outweighed
demand. The IEA breaks down the
surplus to translate to 710,000 barrels
per day in this last quarter of 2015,
which it observes outstrips that of any
other quarter, since the free fall of global
oil price began in 2014; and higher than
any other quarterly surplus in the last 10
years.
Currently, a lowly $44 per barrel is what
crude oil goes for in the international
market. Rather than move up, global
industry watchers as well as the IEA
report establish that the price would
further go downhill. As recently as June
2014, oil price reached a premium of
$101 pb, but by December same year,
crashed to $52 pb.
Price volatility is traditional with oil in the
global market. In 2008, oil price climbed
to $140 pb, all-time high, but by the last
quarter of same year, tumbled down to
$40 pb. The degree of the December,
2008 oil price crash and that of
December 2014, are characterised by
global industry watchers as the biggest
drops in oil prices, within a year, since
80s.
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