Brent Crude Falls Below $70, Raising Global Economic Concerns

For the first time since December 2021, Brent crude oil prices have dipped below $70 per barrel, reflecting concerns about slowing global economic growth. This significant drop is set to exacerbate the depreciation of the naira, which has already fallen to N1,600/$ in recent weeks.

According to Tamas Varga of PVM Oil Associates, while OPEC’s minor revisions to demand estimates played a part, the primary causes include China’s economic troubles, where crude oil imports dropped 7% year-on-year in August, and anticipation that the US Federal Reserve will only cut rates by 0.25%.

Swissquote analyst Ipek Ozkardeskaya added that even factors like pending rate cuts and OPEC+ withholding production increases couldn’t reverse the bearish trend, with oil traders unwilling to “swim against such a strong tide.”

US stock markets showed mixed results on Tuesday, following a disappointing US jobs report that reignited recession fears. The Dow dropped 0.3% while the S&P 500 and Nasdaq Composite saw slight gains. Investors are now closely watching the upcoming US inflation data and Federal Reserve interest rate decisions.

Meanwhile, concerns about China’s economy and weak import data have added to global market volatility. In Europe, the European Central Bank (ECB) is expected to cut rates, while the Bank of England may pause rate cuts after the slowest wage growth in two years.

Key Figures:

• West Texas Intermediate: DOWN 4.0% at $65.96 per barrel
• Brent North Sea Crude: DOWN 3.4% at $69.40 per barrel
• New York Dow: DOWN 0.3% at 40,697.79 points
• London FTSE 100: DOWN 0.8% at 8,205.98 (close)
• Paris CAC 40: DOWN 0.2% at 7,407.55 (close)
• Frankfurt DAX: DOWN 1.0% at 18,265.92 (close)