Oil prices have continued their downward trend in recent weeks as concerns mount over the slowing US economy and uncertainty surrounding OPEC+ cuts.
According to recent reports, Brent crude oil, against which Nigerian oil is priced, declined by 0.8% while the U.S West Texas Intermediate crude oil was down 1%, marking the fourth straight monthly fall for Brent and the sixth straight monthly decline for West Texas Intermediate.
The slowing US economy has been a major factor in the decline of oil prices. Recent data showed that economic growth in the first quarter of 2023 fell more than expected, leading investors to worry that potential interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the US, Britain, and the European Union.
Another concern is the uncertainty over the future of OPEC+ production cuts. While the organization recently cut its combined output target by about 1.16 million barrels per day, there is concern that this may not be enough to offset declining demand.
Russian Deputy Prime Minister Alexander Novak said on Thursday that the OPEC+ producer group saw no need for further output cuts despite lower than expected Chinese demand, adding to the uncertainty in the market and contributing to falling prices.
Despite recent inventory declines, it is unlikely that oil prices will recover anytime soon. With a slowing US economy and ongoing uncertainty over OPEC+ cuts, investors are preparing for continued volatility in the oil market in the coming months.
This has led some analysts to predict that oil prices could fall even further, potentially leading to further declines in the global economy.
As always, the future of the oil market remains uncertain, with a wide range of factors impacting supply and demand.
However, with concerns mounting over the US economy and ongoing uncertainty surrounding OPEC+ cuts, it seems likely that oil prices will continue to face downward pressure in the weeks and months ahead.