New Price Tag of Oil causes serious concern
For the first time in 2016, Oil Prices have peaked to $50 per barrel. This has come to a shock to many consumers who were content with plunging oil prices below $27 per barrel since February. According to some analysts, the soaring prices should have been expected given the disruptive events that have been plaguing world’s biggest suppliers of oil since the past few weeks.
The massive wildfires in Canada have led to a decrease of more than 4 million barrels in the production of commercial crude oil across the US. Oil exports to the US have fallen to new lows since April and industry experts predict that it is likely to decrease by even more if the raging fires persist. Officials revealed that it might take months to completely extinguish the Alberta blaze which has led to the closure of numerous oil wells in Canada. Canada’s supply of oil thus remains unpredictable for the time being.
The supply of oil is hugely threatened in Nigeria also. Nigeria is Africa’s largest oil exporter and since the government hinted that oil prices might increase in the near future, several attacks have been made against oil stations in the country. Political and social instability in the country has been causing much chaos in the local oil market. Analysts predict that if Nigeria continue to close oil production due to the increased threats and attacks, there will be a high mismatch between the demand and supply of oil. Over the past few years, the lack of petroleum products has caused much upheaval in Nigeria and the consequences are likely to be harsher for the economy if the supply dips further.
The newest trend of creeping oil prices will most probably stay for some time as uncertainty continues to reign the global oil market. Soon, just like other countries which rely heavily on oil import, Mauritius might be among the countries to start bearing the brunt of rising oil prices.