The global oil price benchmark, Brent crude, has extended its decline, plummeting to $19 per barrel on Tuesday, amid the demand collapse caused by reduced economic activity. Brent, against which Nigeria’s crude oil is priced, fell by $6.34 to $19.23 per barrel as of 11:01am Nigerian time on Tuesday, while US WTI stood at minus $8.00 per barrel.
The Federal Government had recently slashed the oil price benchmark for the 2020 budget to $30 per barrel from $57 per barrel. Oil prices have been steadily falling since the outbreak of coronavirus, and the demand for crude has plunged as many countries were forced to impose lockdowns to contain the virus.
The price of US crude oil turned negative for the first time in history on Monday amid the deepest fall in demand in 25 years. A flood of unwanted oil in the market caused the US oil price benchmark, West Texas Intermediate, to plummet to almost minus $40 per barrel, meaning that producers were paying buyers to take oil off their hands as storage tanks were filling rapidly.