Oil prices decline after surge in US gasoline stocks

Crude oil prices fell on Thursday after official figures showed a significant increase in gasoline inventories of the United States.

Analysts and market watchers are also concerned about decline of United States oil inventories influenced by demand weakening amid a gradual recovery in economic activity and mixed coronavirus vaccine rollouts.

The price of Brent crude, the grade at which Nigeria’s crude oil is benchmarked, dropped 0.41 percent to $62.89 a barrel by 11:00am on Thursday. The US West Texas Intermediate (WTI) crude also declined by 0.65 percent, to $59.38 a barrel.

On Wednesday, the U.S. Energy Information Administration (EIA) said crude oil inventories for the week ended April 2, excluding those in the strategic petroleum reserve, dropped by 3.5 million barrels from the previous week.

Meanwhile, gasoline stocks increased by 4 million barrels to just over 230 million barrels.

“Refiners may want to pull back on the run rate a bit to keep gasoline storage from challenging the all-time record,” Bob Yawger, director of energy futures at Mizuho Securities told Reuters.

The 2021 budget, which was signed by the President Muhammadu Buhari on December 31, was based on an oil price benchmark of $40 per barrel and a production level of 1.86 million barrels per day.

Recently, the International Monetary Fund (IMF) projected growth of 2.5 percent for Nigeria in 2021 from 1.5 percent announced in January.

It also lifted its global economic growth forecast for 2021 to 6 percent — the strongest annual growth in more than four decades, up from the 5.2 percent it anticipated in October. The rebound comes after a 3.3 percent contraction in 2020.