Naijauto doesn’t need to emphasize for anyone how the depreciating international crude oil value is critically affecting Nigeria because of the economy's total dependence on crude oil export returns.
On Thursday 27th June 2019, the average oil price dropped below $66 (₦23,760) per barrel in the world oil market as a result of pressure over concerns about the 2019 G20 summit possible breakthrough on international trade.
Donald Trump, President of the U.S. had initially said on Wednesday that it was possible to have a trade deal with Xi JinPing – the president of China but he (Trump) is still very much prepared to impose the U.S. tariffs strictly on most of the remaining Chinese imports if the two nations do not reach an agreement.
Any movement from these two leaders may affect the entire world economy
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When making a comment on this Trump’s proposition, Oil Broke PVM, Tamas Varga said;
“A complete breakdown of the talks will have a negative impact on the financial markets and also on oil, but the sell-off in risky assets should be short-lived,’’
“Oil bulls might have to wait until the second half of next week to start firing (on) all cylinders.’’
The current depreciating oil value in the international oil market is having serious negative effects on the Nigeria economy
Most traders commented that uncertainty arising over the 2019 G20 possible trade breakthrough, which poses different perceptions and views is majorly affecting the current oil buying decisions and overall prices.
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An FXTM research analyst, Lukman Otunuga said;
"It would be unwise to be unprepared for a possible scenario where talks descend into disagreements on trade,’’
“Such an outcome will most likely rattle financial markets as concerns over slowing global growth and sizzling trade tensions fuel risk aversion’’
Above all, everyone awaits that the 2019 G20 Summit end and then OPEC (Organisation of Petroleum Exporting Countries), as well as its allies like Russia, will meet to collectively discuss a needed extension of oil production cuts in order to support oil prices.
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