May 22, 2024
OIL MARKET: Prices drop to $64.05 per barrel over slow economic recovery
BREAKING: Oil prices fall to $73.07 per barrel despite dropping inventory
– By Godswill Odiong

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By Eyo Nsima

The prices of crude oil, Friday, dropped further to $64.05 in the global market, ‘after the U.S. dollar strengthened on concern that the global economic recovery might slow’.

With increased vaccination across the world, economic recovery was expected to be rapid in the coming months.

But with the speculated slow recovery, prices started to drop consistently, thus sending fears to members of the Organization of Petroleum Exporting Countries, OPEC.

Consequently, the price of WTI and Nigeria’s Bonny Light dropped to $64.05 and $64.54 per barrel respectively.

However, in its July 2021 Market Report, OMMR obtained by The Daily, www.thedaily-ng.com, OPEC had stated: “Global economic growth forecasts for both 2021 and 2022 were revised up by 0.1 pp, and hence growth for 2021 now stands at 5.6%, while growth in 2022 is now expected at 4.2%. However, the forecast for global growth continues to be impacted by uncertainties, including the spread of COVID-19 variants and the pace of the vaccine rollout worldwide.

“In addition, sovereign debt levels in many regions, together with inflationary pressures and central bank responses, remain key factors that require close monitoring. After lower-than-expected 2Q21 GDP growth, US economic growth for 2021 is revised down to 6.1% from 6.4% previously, while growth for 2022 is revised up to 4.1% from 3.6%.

“Euro-zone economic growth in 2021 is revised up to 4.7% from 4.1%, while growth for 2022 is revised up to 3.8% from 3%. Japan’s economic growth forecast remains at 2.8% for 2021, followed by a growth of 2.0% in 2022.

“Meanwhile, China’s economic growth forecast for 2022 is revised down to 6% from 6.3%, following growth of 8.5% in 2021, unchanged from the previous month’s assessment. India’s 2021 growth forecast is revised down to 9.3%, followed by a growth of 6.8% in 2022.

“Brazil’s growth forecast for 2021 is revised up to 4.2% from 3.2%, followed by a growth of 2.5% in 2022. Russia’s forecast for both 2021 and 2022 is revised up by 0.2 pp to stand at 3.2% and 2.5%, respectively.”

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