It was another oil doom for Nigeria, yesterday, as oil prices fell 5-percent, with West Texas Intermediate (WTI) Crude sliding to $35 a barrel and Brent $36.89.
This happened as two major economies in Europe renewed lockdowns to fight the second wave of the Coronavirus.
For Nigeria, the new shutdown is bad news for the economy, as it reduces the flow of dollars.
Also the 2021 budget, under consideration at the National Assembly is based on a benchmark of $40 a barrel.
As of 10:07 a.m., WTI Crude plunged by 5.27 percent at $35.11, and Brent Crude was plummeting by 4.98 percent at $36.89.
The U.S. benchmark slid to its lowest level since June, while the international crude benchmark Brent dropped below $37 a barrel to its lowest price since May, this year.
According to oilprice.com, the sell-off in oil intensified this week with market sentiment souring by the day since the American Petroleum Institute (API) reported, last Tuesday, a bigger build than expected in crude oil inventories of 4.577 million barrels for the week ending October 23.
The build was confirmed, last Wednesday by the EIA, and oil prices dived five percent on concerns about oil demand with surging Covid-19 cases.
Brent prices had already slid below the $40 a barrel mark, last Wednesday, and yesterday, the rout extended with Brent prices slipping to $36—the lowest level since the middle of May.
The immediate trigger for this was the decision of two of Europe’s largest economies, Germany, and France, to impose a fresh round of lockdowns, to curb Coronavirus.
The move was largely unexpected.
From today in France, people will be allowed to go out only for shopping for essential items, for medical reasons, or for an hour-long exercise.
The measure will last until the end of November, French President, Mr Emmanuel Macron said.
Germany, the biggest economy in Europe, is also restoring a form of lockdown, although a partial one, for the month of November, restricting social gatherings and closing bars and restaurants except for takeaway.