Oil prices have witnessed a slight rebound after dropping below $50 a barrel–the first time it has reached that level since October 2017.
US West Texas Intermediate (WTI) fell 0.84 percent to trade at $49.89 on Thursday morning before inching upward by 1.33 percent to trade at $50.99 in the afternoon.
Brent crude futures, the global benchmark, was down 0.9% to trade at $58.57 a barrel in the morning but traded at $59.31 in the afternoon.
WTI and Brent have dropped by more than one third of the peak prices recorded in October. Brent traded for as much as $85.03 ber barrel while WTI traded as high as $76.90 ber barrel.
Amid the price fall, data from the US Energy Information Administration (EIA) shows that US crude stockpiles keeps increasing– for the tenth consecutive week.
Pressure is mounting on oil-producing nations to engineer another production cut to rein in excess supply and boost prices.
On Wednesday, Russian President Vladimir Putin, whose country is the world’s second biggest oil producer, said he was in touch with the Organization of the Petroleum Exporting Countries (OPEC), expressing willingness to continue cooperation on supply if needed.
Saudi Arabia, a major member of the cartel said the kingdom is confident OPEC and its partners can reach a deal to stabilise the market.
The OPEC and non-OPEC producers will meet in Vienna on December 6 to discuss a new round of supply cuts between one million to 1.4 million barrels per day (bpd) and possibly more to bolster prices.
All eyes will be on the G20 summit, where Russia and Saudi Arabia will likely discuss how to coordinate oil policy.
The implications of the falling oil prices on the Nigerian economy which runs mainly on a single commodity have been tied closely to falling government revenues, exchange rate volatility, rising debt profile and reduction in capital expenditure.