Oil prices plummeted to its lowest in five months after data showed the U.S. rising oil production would offset efforts by the OPEC to moderate prices.

The global oil prices which started falling on Monday following a report that hedge funds and money managers have started cutting bullish positions, dip lower on Thursday to reach its pre-OPEC consensus level.

Since Monday, the WTI has dropped about 9 percent to $45.60, its lowest since November 2016. While the Brent Crude has plunged as much as 8 percent to trade at $48.83, the lowest price level this year.

Experts have said the uncertainty surrounding OPEC policy and the continuous rise of the U.S. oil production will continue to weigh on global oil outlook in the medium term.

“With the future of OPEC policy unclear, the trend of rising U.S. production remains the single biggest headwind for oil prices in the medium term,” said Tyler Richey, co-editor of the Sevens Report.

However, analysts have said OPEC would have to cut more than the 1.8 million barrels a day it cut in November to curtail global glut and normalize prices.

“An extension would be mildly supportive of oil, but because of the recent rise in U.S. production, the effect of OPEC policy on global inventories has been limited and deeper cuts to member production are likely needed to really ignite a rally through the mid $50/barrel level,” said Richey.

Brent crude oil has now erased all its gains since OPEC reached accord on November 30, 2016.

Also, currencies of commodity-dependent economies like the Canadian dollar, Aussie, etc. plunged against the U.S. dollar this week, reaching their lowest exchange rate this year.

According to Samed Olukoya, a foreign exchange research analyst at Investors King Ltd., “The issue is not just the rising U.S. oil production, but also the surge in production level of OPEC members exempted from production cut in November. For instance, Libya has announced that the El-Feel oilfield is ready to resume production after two years, this is an oil field that has a production capacity of 80,000 barrels per day. Likewise, Nigeria is struggling to up its output from about 1.5 million barrels per day to 2 million barrels per day. All these add up to what trigger the sell-off and are expected to further hurt investment in the oil sector if not checked.”

http://investorsking.com/oil-prices-plunge-to-5-month-low-on-thursday/

And cbn is there lifting embargo on the importation of toothpicks.

Just want to grease some palms, shikena, otherwise, where is the forex for those importations coming from?

LionDeLeo:
And cbn is there lifting embargo on the importation of toothpicks.

Just want to grease some palms, shikena, otherwise, where is the forex for those importations coming from?

That is the issue with the CBN I am not sure they are conversant with global events. Exactly, what they did when they introduced Forex Flexibility Policy three days to Brexit in an oil-dependent economy. The result, low capital importation that eventually prompts the apex bank to raise interest rate by 200 basis points to 16%.

Hope OPEC will do something on time, if not Naira gain so far would be eroded.

The rate US is converting Shale gas will crash oil prices




Alaska/USA still have the largest oil deposits in the world




Price of oil will still drop even at the rate alternative source of energy is been used

Groundnut oil ti fe take over... lol

Venezuela was once like Nigeria, now the country is in chaos

The oily curse of nigeria.

The situation is like a house wife who is living comfortable with her husband... But one day a friend introduces her to a male prostitute and she loved the experience... Then she goes home and tells her husband she is not interested in the marriage and quits... And moves in with the male prostitute.... Now even tho she is getting a good banging every now and then.... She can never be at peace because every time his phone rings.. It becomes a nightmare for her...

That is the sticky situation we have put our self in.... All for crude oil..

Hmm

OPEC should work with these oil producing states to see how they can revitalize oil production. If not for our president we will have been exporting more than 2 million barrels per day. So many pipe lines vandalisation in Nigeria is not helping issues

Bad news.

Why now?

Our economy is oil sales dependent, as it is the highest earning foreign exchange sector.

The dollars CBN is pumping into the financial market is coming from crude oil sales, now that the prices are dropping, CBN intervention would be reduced and dollar to Naira will go Northwards.

We need help.

And the CBN has gone on a spending spree.

God...... You really need to help us.

Truth234:


That is the issue with the CBN I am not sure they are conversant on global events. Exactly, what they did when they introduced Forex Flexibility Policy three days to Brexit in an oil-dependent economy. The result low capital importation that eventually prompts the apex bank to raise interest rate by 200 basis point to 16%.

Base interest is now 16%?

Choi, CBN and their MPC communiques of death

Ajekun iya dey come... Brace yourselves my comrades ; the tide is about to rise!

Shale is not profitable at these levels. One of the reasons for the Oil crash was that the Saudis flooded the market knowing that at around $48-55 shale cant exist, hence a lot of shale producers went belly up. Hence my theory that I doubt you wont see oil at old prices and will stay within this range. when you take into consideration that the saudis have oils deposits that cost them around $1.5-2 to extract per barrel! Its not the deposits you have that ar really important, but the cost of extraction.

crackerspub:
The rate US is converting Shale gas will crash oil prices




Alaska/USA still have the largest oil deposits in the world




Price of oil will still drop even at the rate alternative source of energy is been used

PBundles:
Shale is not profitable at these levels. One of the reasons for the Oil crash was that the Saudis flooded the market knowing that at around $48-55 shale cant exist, hence a lot of shale producers went belly up. Hence my theory that I doubt you wont see oil at old prices and will stay within this range. when you take into consideration that the saudis have oils deposits that cost them around $1.5-2 to extract per barrel! Its not the deposits you have that ar really important, but the cost of extraction.

Nice analysis, like replying smart dudes


You forgot to understand after China that is US that consumes lots of energy. What if they decided to buy only there oil what do you think will happen to the price of oil. They still control the price of oil directly and indirectly.

Nice analysis by the way

Ok

PBundles:
Shale is not profitable at these levels. One of the reasons for the Oil crash was that the Saudis flooded the market knowing that at around $48-55 shale cant exist, hence a lot of shale producers went belly up. Hence my theory that I doubt you wont see oil at old prices and will stay within this range. when you take into consideration that the saudis have oils deposits that cost them around $1.5-2 to extract per barrel! Its not the deposits you have that ar really important, but the cost of extraction.

Nothing but the truth. US spends more extracting from shale.

PBundles:
Shale is not profitable at these levels. One of the reasons for the Oil crash was that the Saudis flooded the market knowing that at around $48-55 shale cant exist, hence a lot of shale producers went belly up. Hence my theory that I doubt you wont see oil at old prices and will stay within this range. when you take into consideration that the saudis have oils deposits that cost them around $1.5-2 to extract per barrel! Its not the deposits you have that ar really important, but the cost of extraction.

Saudi didn't flood the market, there was production cut impeding excesses. In fact, Saudi production dropped to 21 months low in February according to OPEC data. Even though, Shale is not profitable at the current price level. They have what is called hedge with commercial banks --that covers their losses for certain years. Previously, we thought Shale won't come on board until prices reach $60/barrel and above but the hedge, Donald Trump negative attitude towards climate change and his favourable tax policy for businesses revamp that sector even at lower prices.

chloride6:


Base interest is now 16%?

Choi, CBN and their MPC communiques of death

Since last year, after Forex Flexibility Policy failed.

The way out of our economic mess is to tightened the system, reduce the over bloated public workers (tough decision but necessary), spend on power and education to drive the industrial revolution we are clamouring for, develop sea and river ports across Nigeria.

Truth234:


Since last year, after Forex Flexibility Policy failed.

Loans go be like 32% be that now.

We don die for this country.

Companies go buy expensive forex come still collect 32% loan.

By the time you factor in 30% company tax, overhead and expenses, company don fold up.

Amoto94:
The way out of our economic mess is to tightened the system, reduce the over bloated public workers (tough decision but necessary), spend on power and education to drive the industrial revolution we are clamouring for, develop sea and river ports across Nigeria.

Lol, who's going to do all that you've listed?

I was surprised to see it go below $50 which I thought was a support price level.

We need to reduce our dependence on oil, that is the only way out.

Nigeria.. Say bye bye to oil

Nukilia:

Lol, who's going to do all that you've listed?

Governments of course.

gadgetsngs:
they got more reasons to complain

http://www.gadgetsng.com/

My thought exactly.

Nothing tangible will happen again this year.

Blaming Jonathan + low oil price = Perfect excuse for APC incompetence.