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Oil Price Volatility Continues as Dollar Strengthens

By on November 5, 2012

 

Crude

The International price of oil has fallen after the dollar emerged stronger with the U.S Government allowing foreign tankers to deliver additional supplies in the wake of super storm Sandy.

Brent crude fell $2.44 to $105.73 a barrel. U.S light crude lost $2.23 to $84.86, its lowest since July.

Economically a stronger dollar makes oil more exensive to overseas buyers in the international market, hence the volatility of the price and the market in general.

The dollar even strengthened in the global comparative currency market ahead of the euro and pound currencies after better-than-expected jobs figures statistics figures for October.

Outputs from East Coast refineries has been hit by Sandy, forcing the U.S government to waive restrictions, enshrined in the Jones Act, on foreign ships delivering oil from U.S ports.

Oil analyst Gene McGillain of Traditional Energy interviewed by Bloomberg news believes that ‘The economic uncertainties and the United States elections have both weighed in on the International Oil price’.

But for Nigeria Africa’s largest Oil producer it is a lot of concern. Because when the prices relatively high she benefits immensely even in benchmarking a given price rate, Finance Minister Dr Ngozi Iweala is worried about the volatility and hopes it stabilizes at a better International rate.

It would also serve as a wake up call for the Nigerian Government to be serious about frugality in iits expenditure pattern and effective prioritization of its economic framework avoiding wastage and curbing corruption.