Weekly Economic And Financial Commentary – September 28, 2020
The EIA’s weekly US Petroleum Report released last week estimates crude oil in commercial storage decreased by 1.64 million barrels (compared to decrease of 4.4 million barrels in the prior week) to 494.4 million barrels (which is about 14% above the five-year average). Market sentiment remained bearish last week due to the prospects of fresh lockdown restrictions in Europe following resurgence of the coronavirus pandemic. Also, trade tensions between U.S and China further exacerbated last week following the new licensing restrictions issued by the Trump administration on US firms exporting certain products to China’s biggest semiconductor manufacturer. On the supply side, following the lifting of blockade on oil exports by the Libyan National Army, oil exports from Libya gained momentum. Overall, crude oil prices traded lower last week by 1.71% to $42.41/barrel. The price at the end of last week increased the year to date decline to 37.4% and is 51.46% above the Federal Government of Nigeria 2020 revised budget benchmark of $28/barrel.
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