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Business News

The stark reason why Crude oil price went negative

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Oil Block

It’s two days straight and the crazy Western Texas Intermediate (WTI) crude oil price remains below zero for the first time ever. Prices fell not just below zero but to negative $40 per barrel. There is a major reason for this price drops.

Why negative: Since the world went into a COVID-19 induced lockdown, demand for crude oil fell drastically. Crude oil derives its value when it is refined and sold. However, with movement restricted and most factories shut down, there is little to no demand for refined crude oil.

Very limited vehicular movement means people don’t have any need to fuel their cars or bikes. Demand from major factories has also plummeted as customers have no need to place orders for non-essential items.  Thus, refineries are left with piles of unrefined crude that they have no immediate use for shutting out any need for immediate use of crude.

READ MORE: Nigeria is in a weak financial position to absorb recession shocks —Bismark Rewane

The result is that crude oil traders find themselves with shiploads of undelivered crude which they need to store somewhere. To, however, store the crude in tank farms, they now have to pay higher. Several reports tracked by Nairametrics point to oil traders effectively paying buyers to take the crude off their hands as it is probably cheaper than paying to keep them inexpensive storage facilities.

Silver lining: The price fall could, therefore, be a temporary issue and could reverse once the lockdown eases in countries across the world. For example, the WTI crude oil price to be delivered in June trades at about $11 on Tuesday (it fell to about $6.5 in intraday trading before rising again) compared to the zero price (which is widely reported) for May contracts.

READ ALSO: Nigeria’s Bonny Light hits $12, yet nobody is buying

But Is Nigeria affected? Nigeria’s flagship bonny light remained stable trading at just about $20 on Tuesday but fell to $14.75 compounding Nigeria’s revenue woes.

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Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Appointments

Standard Bank Group appoints Yinka Sanni as new Chief Executive of Africa Regions

Yinka Sanni has been appointed as Standard Bank Group’s Chief Executive of Africa Regions.

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Stanbic IBTC declares N10.4 billion interim dividend

The Standard Bank Group has announced the appointment of Yinka Sanni as the new Chief Executive of Africa Regions.

This announcement was made by the Group in a post shared via its official LinkedIn account. The bank revealed that Sanni will be replacing Sola David-Borha who is retiring after 31 years of distinguished service to the group.

His appointment will play an integral role in driving the growth of the Standard Bank Group in Africa further in the years ahead.

He is expected to build on the work of David-Borha, a renowned professional who played a key role in growing the Group’s Africa Regions portfolio in terms of capacity, market share and contribution to the group’s headline earnings.

What you should know

  • Yinka Sanni is a Fellow of the Chartered Institute of Stockbrokers of Nigeria.
  • He has served in key positions within the Stanbic Group, as the Chief Executive of Stanbic IBTC Holdings PLC, Chief Executive of Stanbic IBTC Bank PLC, Deputy Chief Executive of the Bank and Executive Director, Corporate & Investment Banking of the Bank.
  • He was also the pioneer Chief Executive, Stanbic IBTC Pension Managers Limited and the pioneer Chief Executive, Stanbic IBTC Asset Management Limited.

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Corporate Press Releases

P2P crypto marketplace, Bitzlato (BZ) partners with Lemonade Finance to ease money transfers across Africa

The partnership will enable users on the BZ platform to buy and sell bitcoins and other cryptocurrencies on the marketplace at zero cost.

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Bitzlato (BZ), the latest P2P Crypto Exchange to enter the African market, has added Lemonade.Finance, a borderless payment platform for Africa, as a payment method to its platform.

Lemonade Finance provides 100% digital payment experience for Africans to seamlessly participate in the global economy from anywhere in the world without any hassle or regardless of where they are from.

The partnership will enable users on the BZ platform to buy and sell bitcoins and other cryptocurrencies on the marketplace at zero cost.

Users in Nigeria will now be able to send Nigerian Naira (NGN) to MPESA at 0% transaction fee.

Speaking about this partnership, Ridwan Olarere, CEO, Lemonade Finance, said:

“We are excited to partner with such an innovative company like Bitzlato to connect more Africans through payment. Many Africans living on the continent face many difficulties when making payments as remittance companies charge high fees and are time-consuming. We are now providing our users with a cost-effective way of sending money to Ghana, Kenya, Uk and Europe.”

Commenting on the opportunities this provides to crypto traders on the BZ platform, Mike Lunov, CEO, BZ, said:

“This partnership will provide a much-needed gateway that enables the markets we serve to seamlessly interact with each other in a borderless and open environment. We seek to break the barriers that presently exist for cross border transfers and enable our users to generate value through the opportunities that accrue from cryptocurrencies trading. The innovation exhibited by the Lemonade platform, and the brilliance of its team assures users of top-notch, secure and reliable transfers going forward.”

Hotflex

According to BZ, during the first month, BZ will refund commissions in manual mode while using Lemonade Finance, but this will be automated at the end of this period.

Following this partnership, BZ is now looking to partner with merchants in the crypto space especially in Nigeria, Ghana, South Africa that have a steady flow of Nigerian Naira (NGN) to increase liquidity on the platform.

British airways

Take advantage of the new Lemonade Finance payment method on BZ, which offers zero transactional fees for money transfers from Nigeria into Kenya. Sign up on BZ and start trading crypto easily today.

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