The price of Brent crude has dropped by 3.43 percent to $36.64 per barrel on Monday after some European countries imposed another round of lockdown to slow the spread of the coronavirus.
The price of US West Texas Intermediate (WTI) also dropped by 3.97 percent to $34.37 per barrel.
Crude oil earnings account for a large portion of Nigeria’s revenue and the economy is projected to enter its second recession in five years on the back of low oil prices and reduced economic activities due to a lockdown imposed to stop the spread of the virus.
To combat the crude revenue drop, the Nigerian government is already making effort to shore up non-oil revenue.
It has also approached lenders like the International Monetary Fund (IMF), World Bank and the African Development Bank (AfDB) for loans.
Traders are also worried that the US could also impose more restrictions in the days to come as the country continues to set records for daily infections.
The United Kingdom, Greece, Austria, France, Germany, Belgium and Ireland are some of the countries that recently increased their COVID-19 movement restrictions.
Movement restrictions and reduced economic activity lower the demand for crude oil and its refined products.
The supply glut in the market is also expected to be worsened as Libya and Iraq move to bring their crude oil to the market.
The Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) are already cutting supplies to the market by 7.7 million barrels per day in a bid to stabilse the market.
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