President Muhammadu Buhari has extended a multi-million dollar amnesty signed with militants in 2009 but upset them by ending generous pipeline protection contracts.
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Crude for September delivery CLU6, -0.88% slumped 46 cents, or 1.1%, to $40.68 a barrel on the New York Mercantile Exchange.
Both front-month West Texas Intermediate crude and Brent crude prices have fallen by over 20% since their respective early-June peaks of $51.23 a barrel and $52.51 a barrel.
Energy major Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analysts’ estimates, as weak oil and gas prices further ate into revenue.
Mihir Kapadia, CEO at wealth management firm Sun Global Investments, said oil was still being depressed by concerns over a supply glut and waning demand from key worldwide markets.
Crude oil has been falling continuously since the beginning of this week due to oversupply concerns in the market.
Benchmark Singapore refinery margins are down 60 per cent from their January highs to $4.28 per barrel, with stocks of product brimming near historic highs. Overall, there is a very low possibility for crude oil prices to bounce back in the second half of this year. “Underlying demand in the USA remains robust”, ANZ bank said.
Because of ongoing oversupply, United States bank Goldman Sachs said this week that it did not expect a big recovery in prices any time soon.
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Crude prices remained under pressure after the Energy Information Administration said that crude oil inventories rose by a surprising 1.7 million barrels last week to 521.1 million barrels, which the EIA considered to be “historically high levels for this time of year”.
