Oil Price Drops To $24, Oversupply Fears Grow

The international oil price benchmark, Brent crude, slid further on Wednesday, as a bigger-than-expected rise in United States inventories and a widening rift within the Organisation of Petroleum Exporting Countries heightened oversupply fears.

Oil prices are near their lowest since 2002 amid the global coronavirus crisis that has brought a worldwide economic slowdown and slashed oil demand.

Brent crude, against which Nigeria’s crude oil is priced, fell by $1.43 to $24.92 per barrel as of 7.15pm Nigerian time on Wednesday after giving up an earlier gain.

US crude inventories rose by 10.5 million barrels last week, far exceeding forecasts for a four-million-barrel build-up, data from industry group the American Petroleum Institute showed, according to Reuters.

“The market sentiment remains bleak as there is no clarity on how long the pandemic will continue,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

The bearish mood in the market was also fuelled by a rift within OPEC.

Saudi Arabia and other members of OPEC were unable to come to an agreement on Tuesday to meet in April to discuss sliding prices.