The international oil benchmark, Brent crude, dipped to its lowest since May on Thursday.
The prices went on a free fall because of demand fears and the decision of the United States Federal Reserve to suspend its bond-buying programme.
The decline is coming with the recent spread of the delta variant of the COVID-19 and a rising dollar.
Brent, against which Nigeria’s crude oil is priced, fell by 3.8 per cent to $65.67 per barrel earlier on Thursday but rose slightly to $66.13 per barrel as of 7:15 pm Nigerian time.
The dollar advanced Thursday after minutes from the Federal Reserve’s July meeting indicated plans to pull back the pace of their monthly bond purchases.
A stronger dollar will make oil more expensive for foreign buyers.
Demand in oil increased during the first half of the year and producers kept supply in check, but by July the spread of the COVID-19 delta variant affected both the demand and supply.
The New Diplomat had in April reported that Crude oil prices got a major boost thanks to optimistic expectations about demand from OPEC+ and rebalancing fuel inventories in the United States.
Brent jumped to over $68 per barrel, and West Texas Intermediate neared $65 per barrel by the middle of the week and could rise even further unless headwinds appear.
Earlier in the week, OPEC+ forecasts that oil demand this year would increase by 5.95 million BPD. This was an upward revision of 70,000 BPD from an earlier projection, and this fact injected optimism in traders, as did OPEC+’s decision to forego a meeting this week and keep producing at previously agreed rates.
