By Adedapo Adesanya
The International benchmark futures, the Brent crude oil, fell below $60 per barrel on Thursday as oil prices continue to suffer losses into the fourth day of the week.
As at the time of this report on Wednesday night, Business Post observed that the future was trading down by 78 Cents or 1.29 percent to trade at $59.46 per barrel.
On the other hand, the US Benchmark, West Texas Intermediate (WTI) was also taking a hit as it was also trading down, however, by a solid $1.03 equivalent to 1.87 percent to trade at $54.03 per barrel.
Despite their results a day late, other futures like the OPEC Basket was also recording losses at $61.24 per barrel while the Nigerian Bonny Light was trading below $61 at $60.39.
This sour look at the oil market followed the rise in US crude oil inventories to 5.7 million according to a Energy Information Administration (EIA) report released on Wednesday. This is in contrast when compared with analyst expectations from the American Petroleum Institute (API) which was looking at an increase of 494,000 barrels.
Also, weak factory activity in China contributed to the crippling effect on oil as the world’s biggest oil consumer, according to official data released on Thursday, showed that its factory activity went down for a sixth straight month in October complemented by slow growth in the country’s service sector activity. This was its slowest on record since February 2016.
Also, the country was supposed to hold trade talks with the United States but has seen a lot of uncertainties, the latest being the summit at which they were supposed to meet to sign the first phase of the deal was cancelled because of violent protests in the South American nation, Chile.
The price, however, didn’t budge even after President Donald Trump said on Twitter that there would be another location for the meeting.
The US Federal Reserve cut interest rates for a third time this year on Wednesday with aims to drive economic growth with a move that is believed could also boost demand for crude.
Meanwhile, according to a Reuters Poll conducted, there are strong expectations that oil prices are likely to remain pressured this year and next after taking into consideration the view of 51 economists and analysts, it was concluded that Brent crude would average $64.16 per barrel in 2019 and $62.38 in 2020.
Modupe Gbadeyanka