Oil Prices Open Lower on Monday Amid Global LockDowns

• Oil Prices Open Lower on Monday Amid Global LockDowns

Oil prices opened lower during Asian trading session on Monday as global lockdowns escalated amid fast-spreading COVID-19.

The Brent crude oil, against which Nigerian oil is measured, declined by $1.68 or 4.7 percent from $27.21 per barrel it closed on Friday to $25.53 per barrel on Monday.

The U.S West Texas Intermediate (WTI) declined to $22.31 per barrel, down from $23.42 per barrel it closed on Friday.

Growing uncertainty surrounding the coronavirus is dictating market direction, especially after nations and businesses started shutting down operations to focus on safety and reduce the spread of the virus that has killed more than 5,000 people globally.

“Expectations of severe economic damage due to the increase in coronavirus fatalities will diminish investor interest in gold. Anxious investors may stockpile cash in spite of economic easing measures taken by various central banks due to the increased number of national lockdowns,” said Hareesh V, Head of Research at Geojit Financial Services.

In Nigeria, the number of infected people rose by 23 in the last 4 days to 35 cases despite efforts by the government to contain the spread of the pandemic in Africa’s largest economy.

The nation’s stock market has lost over 17 percent of its value this year while investors shunned Nigeria’s Eurobond in spite of 12.8 percent yield on offered for safe haven.

On Friday, the central bank lowered the Naira official foreign exchange rate to the U.S dollar from N307/$1 to N360/$1 due to the decline in the foreign reserves and weak global demand for the nation’s crude oil.