Oil prices plummeted around 5% on Thursday as concerns over global oil demand following discouraging economic data from the U.S. and Asia intensified.
Brent crude oil, against which Nigerian crude oil is priced, dipped by $3.76 or 4.6% to $77.42 per barrel while the U.S. West Texas Intermediate crude (WTI) experienced a $3.76 or 4.9% decrease to settle at $72.90.
Both Brent and WTI hit their lowest levels since July 7, reaching $76.60 and $72.16, respectively.
Analyst Phil Flynn from Price Futures Group remarked on the prevailing negativity, stating, “The mood is negative, the charts are negative.”
He emphasized the need for a significant development to shift this sentiment, indicating that investors are currently riding the downward trend.
The concerns about weakening global demand were fueled by multiple factors, including a rise in Americans filing new unemployment claims and a dip in U.S. retail sales for the first time in seven months.
Also, indications of a slowdown in Chinese oil refinery throughput added to investors’ apprehensions.
While geopolitical tensions, such as the escalating Israel-Hamas conflict and U.S. officials’ commitment to enforcing oil sanctions against Iran, played a role, the market’s current state reflects skepticism about the predicted fourth-quarter stock draw.
This significant drop in oil prices underscores the delicate balance between geopolitical events, economic data, and market perceptions that dictate the volatile landscape of the global oil market.
