- Oil prices have risen past $40 for the first time in 3 months
- This was after it fell by over 30% which was considered as the worst fall since the Second Gulf War
- At the moment, there are ongoing discussions about the possibility of extension of production cuts
For the first time in three months, the price of oil on Wednesday, June 3, increased beyond $40, Buisness Insider reports.
This is coming after the price fell by over 30% and was considered as the worst drop since the Second Gulf War.
Information available shows that Brent crude rose to $40.12 a barrel amid reports that OPEC+ members are calling for an extension of production cuts currently set to end in June 2020.
A leading member of the Organisation of Petroleum Exporting Countries (OPEC), Saudi Arabia, has reportedly called for a one to three months extension.
This comes as a sharp contrast to a one-month only extension being called for by Russia and other OPEC+ members.
Meanwhile, Legit.ng previously reported that U.S oil prices plunged, falling below $0 on Monday, April 20 to $-37.63 a barrel.
It is the lowest level since oil futures trading began in 1983 as the economic crisis set off by the coronavirus pandemic continues to take a toll on the energy sector. Oil prices were under pressure as the measures to curb the spread of the virus saw fuel demand evaporate.
That means oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May 2020.
“There is little to prevent the physical market from the further acute downside path over the near term,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets.
In a related development, Mele Kyari, the group managing director of the NNPC, said the slump in the US crude oil futures below $0 per barrel is not a reflection of the reality in the global oil market capable of impacting Nigeria’s oil production.
GMD of NNPC who spoke with told Premium Times on Tuesday, April 21, stated that Nigeria has no cause to be apprehensive.
He said the current position in the U.S market, does not have any direct impact on the price of the Brent crude oil blend, which rose to about $28 per barrel before dropping to the current price of to $26.24 a barrel.
Oil price crash: What does this mean for Nigeria? | Legit TV