Oil Prices Drop Below $79

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Oil prices last Friday, fell for the fifth straight day, dipping below $79 a barrel as the American currency strengthened and forecasters saw milder winter weather ahead.

The Tide reports that benchmark crude for February delivery slid 57 cents to $78.82 a barrel on the New York Mercantile Exchange.

The weather outlook for the next 10 days calls for above average temperatures across nearly all regions of the US, while virtually all parts of Europe is experiencing freezing temperatures, which should temper demand for heating oil.

With Nigeria now exporting between 2million and 2.4million barrels of crude oil per day, it follows that the country makes approximately $158million and $189.6million, which translates to about N20.224billion and N24.268billion daily on crude oil sales at the international market.

The Tide notes that crude prices have been on the rise since early December following unprecedented cold temperatures across Europe and North America, with heavy snow enveloping streets, roads and homes, and disrupting economic and social activities.

Prices also fell on concerns about weak consumer demand as the US Labour Department reported that inflation-adjusted wages fell 1.6 per cent last year, the sharpest drop since 1990 and well below the 2.7 per cent inflation rate for the year.

That came on the heels of data released last Thursday showing a drop in retail sales in December.

In other Nymex trading in February contracts, heating oil fell 2.06 cents to $2.0623 a gallon and gasoline slid 1.52 cents to $2.0582 a gallon.

Meanwhile, natural gas futures gained 7.5 cents to $5.663 per 1,000 cubic feet.

 

Nelson Chukwudi, with agency reports