U.S. exited the Paris Climate Deal, a global efforts to deal with the challenges of global warming, yesterday. This will have sever challenges to Nigeria;s economy. The impact is already being felt in the markets.
Oil prices tumbled below $50 on Friday amid worries that U.S. President Donald Trump’s decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.
Global benchmark Brent crude futures was down 1.7 percent, or 80 cents, at $49.75 a barrel, as of 0725 GMT.
U.S. West Texas Intermediate crude CLc1 futures dropped 87 cents, or 1.81 percent, to $47.46 per barrel.
Commodity markets were absorbing news the United States would withdraw from the landmark 2015 global agreement to fight climate change, a move that fulfilled a major campaign pledge but drew condemnation from U.S. allies.
The impact is that OPEC will largely be irrelevant as U.S. drillers will pump without any environmental concern which will help reduce their production cost.
Surging U.S. production has put a strain on OPEC members’ efforts to curb production to drain a global crude supply overhang.
A week ago, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC members met in Vienna to roll over an output cut deal to reduce 1.8 million barrels per day (bpd) until the end of next March.
Oil prices are down some 7.5 percent since OPEC’s May 25 decision to extend the cuts.