Oil prices in five-day losing streak on US inventory surge

Oil prices dropped on Thursday to extend their losing streak to the fifth day after a sustained rise in United States (US) crude and fuel inventories.

Brent crude, the international benchmark, dropped 1.1% at $67.27 a barrel early Thursday morning after dropping 0.6% on Wednesday. U.S. oil was also down at 1% at $63.97 a barrel, and falling 0.3% in the previous session.

U.S. Energy Information Administration (EIA) said on Wednesday that US crude inventories increased by 2.4 million barrels last week.

Refiners have continued to bring back capacity after the freezing conditions in February.

At the end of its 14th OPEC and non-OPEC ministerial meeting held early this month, the committee agreed to keep oil output unchanged in April while Saudi Arabia will also maintain its 1 million barrel-a-day voluntary production cut next month.

The drop in crude oil will further put pressure on Nigeria’s revenue to finance the 2021 budget.

The budget has a benchmark oil price of $40 per barrel; daily oil production estimate of 1.86 million barrels (inclusive of condensates of 300,000 to 400,000 barrels per day); exchange rate of N379 per US Dollar; GDP growth projected at three per cent; and inflation closing at 11.95 per cent.

Oil prices have been on a tear since late last year as coronavirus vaccines and supply curbs from OPEC and its allies spur hopes that global stockpiles will continue to slide.