UNREST in the Middle East and new shale gas discoveries in the United States of America (US) have continued to worry major oil exporters, as global demand for crude continues to nosedive. Brent crude futures traded below $106 a barrel on Monday, as against $107 per barrel, a development industry operators attributted to the bulging US inventories and soft global demand forecasts which had overshadowed supply concerns already tied to Middle East tensions.
However, experts said Nigeria’s economy was still operating on the safe side, since the Federal Government had bench-marked crude oil price at $78 per barrel in the 2013 budget.
Many economists had complained that the government should diversify the economy to increase the source of revenue, reduce total dependence on oil revenue and generate more employment.
Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, had allayed the fear of revenue shortage as a result of drop in global oil demand, by saying that “Nigeria is already exploring Asian market to deluge demand from United States of America.”
But experts said the only concern was the drop in crude oil export to the United States, which is the largest importer of Nigerian sweet crude.
The European benchmark ended last week at its highest since April, after hitting an intra-day high of $106.64 on worries over Middle East tensions and despite a grim global oil demand outlook by the International Energy Agency (IEA), Organisation of Petroleum Exporting Countries (OPEC) and the US Energy Information Administration.
Brent crude eased five cents to $105.88 a barrel early on Monday, while the US oil demand dropped by 13 cents to $97.72 a barrel.
Information from the international oil market showed that US oil marketers were eager to know the outcome of Federal Reserve meeting.
The meeting would start today, but experts said chairman, Ben Bernanke, would give more clarity on how and when the regulator would scale down its massive stimulus programme.
Analysts said the political crisis going on in Syria topped agenda between US President, Barack Obama and Russia’s Vladimir Putin, as they both sought to find common ground on how to bring Bashar Assad to the negotiating table, in order to end the two-year civil war.
Though Syria is not a key to global oil supply, investors were worried that the civil war in the country could drag in other countries and plunge the whole region into conflict.
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