Ever since the outbreak of the Coronavirus (COVID-19) epidemic, many areas of the global automotive and transportation industry have been badly affected. The much-loved Geneva Motor Show had to be canceled for this year and just a few days ago, the price of the Brent Crude oil suffered an unbelievable crash from $45.72 (₦16,800) per barrel to $33 (₦12,100) per barrel overnight.
World’s oil price benchmark, Brent Crude suffers huge price crash from ₦16,800 per barrel to ₦12,100 in one night
The Brent oil is the international benchmark that Nigeria’s crude oil is priced against and this epic price crash is currently recorded to be the lowest ever since the last that happened on the 12th of February 2016.
According to press reports, this historic oil price slump is coming as a result of Saudi Arabia’s launch of a new price war against Russia. CNN business even claims that traders are now getting ready for a new set of market activities as Saudi Arabia is expected to soon flood the oil market massively in order to recapture a huge share of the market.
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As of last week, all negotiations between the OPEC (Organization of Petroleum Exporting Countries) and its various partners totally broke down. The leader of these 10 allies, Russia strongly refused the proposed plan for a deeper cut in crude oil production in a bid to tackle the impact of the Coronavirus on the world’s oil demand.
In a general view, the Coronavirus epidemic still remains the most obvious factor causing confusion, disagreement and new trade proposals or policies in the global oil market. This is obvious because oil prices have been globally declining ever since the outbreak of this deadly virus due to a drop in demand until now.
Hopefully, the Coronavirus will be curbed soon before Nigeria’s economy begins to suffer the effects of this unstable international crude oil market.