COVID-19: US oil price plummets to a ridiculous ₦57 per barrel which is the lowest ever in 105 years

04/22/2020

Posted by: Oluwaseun Solomon

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Coronavirus lockdown results in a huge plummet of U.S crude oil price to the point of becoming almost “free” for now. Read the detailed report here!

Believe it or not, U.S crude oil producers are currently paying people to help reduce the current quantity of their oil products. Yes, you read that correctly; Oil sellers are currently paying buyers to take away their products in order to reduce the growing excess they currently have in their limited storage facilities.

U.S-oil-price-plummets-below-zero-dollar

U.S oil price plummets below zero and currently trades at negative prices (-$2) which is more like “free"

How can U.S oil trade at ₦57 per barrel?

Actually, it is now even trading at a negative price.

The current COVID-19 lockdown has allegedly contributed largely to this catastrophic situation as it has caused a massive drop in oil demand while excess production by the sellers continued. Now, oil companies in the United States do not have not enough storage facilities to keep their oil products. Hence, the unbelievable situation of sellers having to entice buyers by paying them to come to take their products. It was reported that the last time U.S oil price dropped this hard was in the year 1915 (105 years ago).

Will the price of Nigeria oil also crash because of this U.S oil crisis?

We need to clearly point out that Nigeria’s crude oil is actually benchmarked with BRENT CRUDE which is totally different and less affected by any huge drop in U.S oil price. This is because the United States’ oil is actually listed on the Forex market as “WEST TEXAS INTERMEDIATE”, meaning it is a totally different tradeable instrument.

As of the time of writing this report, the last big crash of Nigeria’s oil Benchmark “BRENT CRUDE” was recorded last month when this International Crude oil slumped from ₦16,800 per barrel to ₦12,100 amidst COVID-19 outbreak. Ever since that time, the price of our international benchmark has been rising and dropping steadily based on supply and demand. Currently, this BRENT CRUDE is priced around $26.36 (₦10,225.83) per barrel.

See this video below where BBC NEWS explains the cause of this sudden U.S oil price collapse better;

Coronavirus: oil price collapses as demand falls further - BBC News

Once again, the price of Nigeria’s crude oil is not affected directly by the U.S oil price crash and will not directly lead to any economic meltdown in our country like rumors are currently portraying!

Do not panic unnecessarily.

#Stay home and #Stay Safe.

>>> Catch up with the fresh COVID-19 auto-updates by visiting Naijauto daily!

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Oluwaseun Solomon

Oluwaseun Solomon

Market news

Oluwaseun Solomon is a prolific and diligent automobile writer at Naijauto.com. He's also an experienced digital marketer and a creative multimedia developer that specializes in video editing. He currently contributes informative and easy to read articles on topics covering transportation, traffic updates, auto industry updates, and different car reviews.
When Solomon is not writing, you will either find him composing music, editing videos or simply enjoying YouTube "TEDx Talk" videos with a chilled drink :)

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