The United States of America (Nigeria's biggest oil consumer) has drastically reduced its demand for oil from Nigeria due to a rise in stockpiles of distillate fuel that has almost reach a 26-year high according to the American Petroleum Institute. This has forced the price of oil to drop below $71 per barrel.
America's reduced consumption of Nigeria's oil comes as a big blow to the country because 95% of Nigeria's economy is dependent on oil revenue. The U.S. buys more than 1 million barrels out of the 1.7 million barrels Nigeria produces per day.
Commodity strategist at Commonwealth Bank of Australia in Sydney, David Moore made these following statement:
"Most of the macro data from the U.S. over the last month has been supportive of oil prices,"
"But inventories remain high and demand is weak, so that's capping prices."
David Moore also predicted that crude will most likely average $64 per barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.
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