Nigerian ravaged by acute hunger and poverty caused by economic constraints m, along with other oil producing nations are in for further belt tightenings as oil prices fall world wide.
The decline in oil prices will lead to significant real income shifts from oil exporters to oil importers, likely resulting in a net positive effect for global activity over the medium term. However, several factors could counteract the global growth and inflation implications of the lower oil prices.
Normally, the biggest impact on oil prices should be that like most commodities, the fundamental driver of oil's price being supply and demand in the market, the cost of extracting and producing oil is also an important factor.
To the common man, for example, there is presumed to be a direct relationship between a drop in fuel prices means lower transport costs and cheaper transportation which leaves more disposable income in people's wallets. Also, since many industrial chemicals are refined from oil, lower oil prices benefit the manufacturing sector
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Oil settles near 3-year low on weak demand outlook
By Georgina Mccartney
September 10, 202410:38 PM GMT+1Updated 13 hours ago
Item 1 of 2 Oil tankers wait at anchorage in the Black Sea off Kilyos near Istanbul, Turkey, December 8, 2022. REUTERS/Mehmet Emin Caliskan/File Photo
[1/2]Oil tankers wait at anchorage in the Black Sea off Kilyos near Istanbul, Turkey, December 8, 2022. REUTERS/Mehmet Emin Caliskan/File Photo Purchase Licensing Rights, opens new tab
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Brent futures settle below $70 for first time since December 2021
OPEC revises down world oil demand for 2024, 2025
Tropical Storm Francine causes offshore production shut-ins
This is how Reuters reports it:
-Global oil benchmark Brent crude futures settled at their lowest level since December 2021 on Tuesday, after OPEC+ revised down its demand forecast for this year and 2025, offsetting supply concerns from Tropical Storm Francine.
Brent crude futures settled down $2.65, or 3.69%, at $69.19 a barrel. U.S. West Texas Intermediate (WTI) crude settled down $2.96, or 4.31%, to $65.75 a barrel.
Both benchmarks dropped by more than $3 during the session, after each rose by about 1% on Monday. WTI crude futures fell more than 5% on Tuesday, hitting their lowest levels since May 2023.
On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) in a monthly report said world oil demand would rise by 2.03 million barrels per day (bpd) in 2024, down from last month's forecast for growth of 2.11 million bpd.
Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023.
OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd. Prices slid on the weakening global demand prospects and expectations of oil oversupply.
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Separately, the U.S. Energy Information Administration (EIA) on Tuesday said global oil demand is set to grow to a bigger record this year while output growth will be smaller than prior forecasts.
Global oil demand is expected to average around 103.1 million barrels per day this year, the EIA said, some 200,000 bpd higher than its previous forecast of 102.9 million bpd.
Oil prices remained depressed after the EIA forecast release, as concerns about China continued to weigh on prices.
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Data released on Tuesday showed China's exports grew in August at their fastest in nearly 1-1/2 years, but imports disappointed with domestic demand depressed.
Meanwhile, Asian refiners' margins fell to their lowest seasonal level since 2020 last week on rising supplies of diesel and gasoline.
"There's almost no oil demand growth in the advanced economies this year. Fiscal stimulus in China has not boosted the construction sector; that's one big reason Chinese demand for diesel is shrinking," said Clay Seigle, an oil market strategist.
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