IES warns of halt in Ghana’s oil production as Brent crude prices drop

IES warns of halt in Ghana’s oil production as Brent crude prices drop

- The Institute of Energy Security (IES) has raised an alarm about a possible pause in Ghana's oil production

- It explained that the halt could be a result of the fall in the world market price of Brent Crude

- A historic fall in global oil prices has compelled traders to pay buyers to transport and store oil

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The Institute of Energy Security (IES) has expressed concerns about a possible halt in oil production in Ghana.

According to the IES, this could result from the fall in the global price of Brent Crude on the world market.

On Monday, April 20, 2020, prices on the May contract for West Texas Intermediate crude futures fell as low as $14.47 per barrel in afternoon Asian trade, just above the $14.40 price set more than 21 years ago.

READ ALSO: Royal Vopak NV: World's biggest oil storage firm running out of space store oil

The international benchmark Brent crude futures, meanwhile, fell 2.8 percent to $27.28 per barrel.

Paa Kwesi Anamuah Sakyi, the Executive Director of IES, has posited that the falling price of Brent Crude could also affect Ghana’s revenue receipts.

The price of oil in the United States of America (USA) turned negative for the first time in history on Monday, April 20, 2020.

This has compelled oil producers to pay buyers to take over the commodity as fears grow of a possible shortage of storage capacity in May 2020.

The lockdown approach adopted by several countries all over the world has led to a fall in demand for oil and tankers are reportedly being rented to store the oil surplus, reports.

A dispute that arose in March 2020 between Russia and the Saudi Arabia-dominated Organisation of Petroleum Exporting Countries (OPEC), has also driven prices lower.

Information available shows that the demand for oil has dropped about 30% all over the world. earlier reported that oil prices in the United States of America (USA) dropped by 305% and now sells at -$36.73 per barrel.

The historic fall on Monday, April 20, 2020, saw traders unloading positions ahead of the May contract’s expiration on Tuesday, April 21, 2020.

Per a report by Yahoo Finance, the June contract was trading lower by 18 percent at $20.43 a barrel.

The International Energy Administration (IEA) has projected that demand for crude oil is likely to fall by 29 million barrels per day in April 2020.

READ ALSO: Fall in world prices: Fuel prices may not fall in Ghana - COPEC

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