It is no longer news that the price of oil in the international market is dropping.
What is however news is the rate at which it is dropping. As at 7am GMT (8am Nigerian Time), Brent was down by 4.15% at $32.89 per barrel while US crude plummeted by 3.84% to stand at $32.66 per barrel.
According to analysts, this is the lowest prices of oil in the international market since 2002, when the world was recovering from the September 11, 2001, terrorist attacks on the United States.
The price of oil hit its lowest levels in 11 years on Wednesday, with the Brent crude, which is the European benchmark, selling for less than $35 per barrel and the Brent slipping to $35.54 per barrel in the early hours of trading.
The current free fall of the product was instigated by tensions between Saudi Arabia and Iran, which was caused by the execution of a Shi’ite cleric, Sheikh Nimr al-Nimr along with 46 others, by Saudi authorities.
This led to the severance of diplomatic ties between the two very important oil producers, sending oil prices sprawling.
Perhaps a more important cause is the volatility of the China markets. The Chinese authorities devalued national currency, the yuan, against the dollar overnight, by 0.51%, which signalled the biggest drop between the currencies since August 2005.