Crude Oil Prices Drop as Naira Gains Strength in Parallel Market

Crude oil prices have continued to decline, while the Nigerian naira shows signs of stability against the US dollar in the foreign exchange market.

Oil prices fell by approximately two percent this week, hitting a 12-week low, following reports that OPEC+ plans to proceed with an increase in oil production starting in April. Brent crude futures dropped by $1.19, or 1.6 percent, settling at $71.62 per barrel, while the United States West Texas Intermediate (WTI) crude fell by $1.39, or two percent, to settle at $68.37 per barrel. These figures mark the lowest closing prices for Brent since December 6 and for WTI since December 9.

The decline in oil prices comes as the Organisation of the Petroleum Exporting Countries and its allies, including Russia (collectively known as OPEC+), decided to move forward with a planned output increase in April.

Meanwhile, the Nigerian naira appreciated in the parallel market, trading at ₦1,512 per dollar on Wednesday, compared to ₦1,515 per dollar on Tuesday. However, in the Nigerian Foreign Exchange Market (NFEM), the naira experienced a slight depreciation, falling to ₦1,505 per dollar from ₦1,502 per dollar on Tuesday. This represents a ₦3 decline in the official market.

As a result, the gap between the parallel market rate and the NFEM rate narrowed to ₦7 per dollar on Wednesday, down from ₦13 per dollar the previous day.

The contrasting trends in crude oil prices and the naira's performance highlight the dynamic nature of global and local economic markets, with stakeholders closely monitoring developments for potential impacts on Nigeria's economy.

Source News

Channelstv

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