The United States (U.S.), consumer of over one million barrels of crude daily from Nigeria, continued to stockpile crude on Tuesday, an action, which worsened the fall of the commodity in two weeks.
America, which had earlier signified interest to begin its oil exploration, did not give reasons for this occasional rise in oil stockpile.
The surge in stockpile would bring more money to the coffers of Nigeria, Africa’s top crude producer and exporter.
The country, which produces more than 2.3 million barrels of crude per day, depends largely on proceeds from crude to service over 85 per cent of its budget.
Analysts however believed that the fall in prices of the commodity due to stockpile increase by the U.S. would dip the wealth, which Nigeria is expected to make from the increase in hoard.
An Energy Department report, which would be released on Wednesday, shows that the U.S. crude stockpiles rose for a fourth week.
“The concerns in Europe are going to create a lack of confidence again,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. “People will pull the horns in from spending. That feeds back into the demand prospects for crude. We’ve also still got a fair few barrels in the U.S.”
Crude for June delivery slipped as much as 61 cents to $96.76 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.19 at 12:48 p.m. Singapore time. Oil fell $2.28, or 2.3 percent, on Tuesday to $97.37, the lowest since May 6. Prices are 39 percent higher in the past year.
Brent oil for July settlement slid 22 cents, or 0.2 percent, to $110.62 a barrel on the London-based ICE Futures Europe exchange. The June contract expired on Tuesday. It lost $1.10, or 1 percent, to $112.73.
European finance ministers for the first time suggested talks with bondholders on “reprofiling” Greece’s debt repayments, saying last year’s 110-billion euro ($156 billion) rescue has failed to restore the country to financial health, according to Juncker. His comments suggest ministers’ views are closer to the 85 percent of international investors who, in a Bloomberg poll last week, said Greece is likely to default.