Economy

Economic recession imminent in Nigeria as crude oil falls to $28.40

Brent crude on Wednesday reduced to $28.40, the lowest since early 2016.

It should be noted that Nigeria’s major means of generating income is through the sale of crude oil; meaning that the country is an oil dependent economy.

It was gathered that the price was down by eight per cent or O.3 per cent from 28.81 hours ago, as coronavirus epidemic hits the world.

United States (US) crude was also down two cents at $26.93 a barrel, after falling to as low as $26.20, also the lowest in four years. West Texas Intermediate fell six per cent on Tuesday.

A fall in US inventories of crude, gasoline and distillates, as reported by an industry group, provided some support to prices, but the demand outlook remains grim amid a price war among major producers.

“The demand prospect (is) looking even more dismal today as everyone rushes to revise demand growth lower,” said Stephen Innes Global, chief markets strategist at AxiCorp.

In efforts to support economies, the world’s richest nations prepared to unleash trillions of dollars of spending to lessen the fallout from the coronavirus outbreak, as well as imposing social restrictions not seen since World War 11.

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