(3 minutes read)
· Oil slipped to US$50 a barrel yesterday as the Europe is gearing towards a lockdown due to the second wave of the pandemic and the forecast of a slower demand recovery
· The dithering of the price of oil will have a mixed impact on Africa.
· The oil producing countries like Nigeria, Angola and Libya would face their revenue fall from oil exports
· The non-oil producing countries, on the other hand, are slated to gain from the drop since it can reduce their import bill
Oil slipped to US$50 a barrel yesterday as Europe is gearing towards a lockdown due to the second wave of the pandemic and the forecast of a slower demand recovery. The prospect of the vaccine did not insulate the battering of oil prices.
London tightened the restrictions requiring bars and restaurants to close. The case in Italy, which bore the brunt of the pandemic in the earlier stages, is no different. Germany is likely to be under lockdown until early 2021 as a precaution against spread of the coronavirus. As result, Brent crude fell two US cents to US$50.27 a barrel. US West Texas Intermediate (WTI) crude was up 2c at $47.01.
Significantly, oil prices have looked up in the recent months. The Brent reached US$51.06, its highest since March, on December 10. This has raised the hope that demand recovery was in sight. But the prices tanked to historic lows in March as the pandemic took hold.
The dithering of the price of oil will have a mixed impact on Africa. The oil producing countries like Nigeria, Angola and Libya would face their revenue fall from oil exports. The non-oil producing countries, on the other hand, are slated to gain from the drop since it can reduce their import bill. The OPEC has stated that the expected increase in oil prices in 2021 riding on the back of increase in demand in the wake of the vaccination may be delayed.
