Oil prices are likely to record their worst week since March 2021, as demand for oil in India drops to a 9-month low.
India is regarded as the world’s third-largest importer of oil but as a result of the current COVID-19 Delta variant plaguing the country, which has caused the government to impose new lockdown restrictions, the nation has seen its oil demand drop to 3.9 million barrels per day (bpd) of crude oil in June, down by 7% compared to the imports in May.
With the addition of more OPEC+ barrels to global supply and India’s oil imports dropping by 7% in June as a result of rising COVID-19 cases, the price of oil is set to be bearish for the short term.
For Nigeria, this is good news as the landing cost of oil will reduce, thereby decreasing the cost pressure on NNPC to meet up with subsidy obligations. The NNPC Group Managing Director (GMD), Mele Kyari has stated that the landing cost of oil stands at N232, which is below the current pump price by 28.45% or N66, to stand averagely at N166. Reduction in the landing cost will help NNPC greatly in meeting up with subsidy obligation.
Brent oil is currently trading $73.84 a barrel, up 0.50% and U.S oil is trading $72.13 a barrel, up 0.67%, as of the time of writing this report.
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