Oil Prices Rebound on Tuesday After Plunging to 18-year Low

• Oil Prices Rebound on Tuesday After Plunging to 18-year Low

Global oil prices climbed off 18-year lows on Tuesday after President Trump and President Vladimir Putin agreed to discuss how to stabilise the global oil market.

Brent crude oil, against which Nigerian oil is priced, plunged to an 18-year low of $22.76 per barrel on Monday as the global health crisis worsen. The crude oil, however, jumped 16.12 percent on Tuesday to $27.13 per barrel the two presidents agreed to discuss energy markets.

President Trump had blamed both Saudi Arabia and Russia for hurting oil prices with their inability to reach an agreement to cap production despite the coronavirus pandemic.

The U.S West Texas Intermediate (WTI) gained 7.8 percent from $20.09 per barrel to $21.66 a barrel on Tuesday.

According to news from Kremlin, President Trump and President Putin had agreed during a phone call to have their top energy officials discuss oil markets.

Experts, however, doubt this would be effective given the current global health crisis, especially after reports revealed most producers are offering discounts to attract buyers, meaning no one is selling at $27 per barrel at the moment.

“The gap between physical assessments and futures reflects the differences between the realities on the ground and speculation about efforts to ease that pressure going forward,” JBC Energy said.

Therefore, the renewed attractiveness may be temporary without a credible solution to contain coronavirus pandemic. This was why Mrs. Zainab Ahmed, Nigeria’s Minister of Finance, during the weekend said if the current situation continues for six months, the nation will plunge into an economic recession.