CUDE oil prices plunged roughly seven per cent on Tuesday as both the American and world benchmarks fell below $100 a barrel.
According to New York Times, the Chinese economic outlook, dimmed by lockdowns to contain COVID-19 outbreaks, appeared to be the major cause of the decline, along with increasing signs of a global economic slowdown.
China is the world’s leading oil importer, and the second largest consumer after the United States. In addition, while demand may be weakening, supplies have withstood the strains spurred by Western sanctions against Russia, which has found new markets for its oil and petroleum products in China, India and South America.
“We’re past the point where the market was tightest, and I think from here we’re going to see oil inventories rising and prices moderate,” said Michael Lynch, president of Strategic Energy and Economic Research, an analytics firm.
“China is a big part of it. They have been carrying oil demand for 10 years.”
At midday, the price of West Texas Intermediate, the U.S. benchmark, had dropped 7.8 per cent to $96.01 a barrel, while Brent crude, the international standard, had declined 6.9 percent to $99.76.
Brent briefly fell below $100 last week before rebounding. Oil prices surpassed $120 a barrel last winter after Russia invaded Ukraine.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) has said Nigeria’s crude oil production increased to an average of 1.238 million barrels per day (bpd) in June 2022.
OPEC made this known in its Oil Market Report for July 2022 which was obtained by the News Agency of Nigeria (NAN) on Tuesday in Lagos.
The report said the figure showed an increase of 5,000 barrels per day when compared to the 1.233 million bpd produced averagely in the month of May 2022.
“According to secondary sources, averaged 28.72 mbpd in June 2022, higher by 234,000 barrels per day month-on-month.
“Crude oil output increased mainly in Saudi Arabia, the United Arab Emirates, Iran, Kuwait and Angola, while production in Libya and Venezuela declined,” the report said.
