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There are fears of emerging collapse of OPEC’s permutation on the rising trend of global oil prices as oil benchmark, Brent crude, continued its downward movement on Wednesday, trading around $43 per barrel, down from a 2016 peak of $52.54.
Oil prices plummeted over $1 per barrel within minutes after official United States energy data showed an unexpected glut of oil in storage.
Within the short period, Brent crude quickly dropped from around $44.90 per barrel to $43.68, a decline of more than two per cent, after the surprisingly high storage data was revealed, dragging the market deeper into multi-month lows.
It would be recalled that the US crude oil stocks rose by 1.7 million barrels to 521.1 million barrels last week, according to the US Energy Information Administration, a development that shocked analysts who had expected the weekly report to show that stocks had fallen by 2.3 million barrels.
Data from the American Petroleum Institute had also buoyed hopes that oil stocks might be waning, stating on Tuesday that stocks fell by 827,000 barrels.
Business Hilights recalls that Brent crude had on June 8 climbed by as much as 2.1 per cent to touch $52.54, the highest price since last October. The US oil benchmark, West Texas Intermediate, also rose by nearly two per cent to $51.34 per barrel, its highest intraday price since last July.
However, the oil price had already seen its tentative recovery threatened by the rising US dollar and jittery demand forecasts, falling to $44.75 per barrel on Monday, its lowest level since oil traded at $43.63 per barrel on May 9.
It was not clear if Nigeria’s rising supply trend has a hand in the emerging price shock.