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Market Price of Crude Oil

Price of Crude Oil
Picture Source: Citi Business News

Price of Crude Oil: As one of the most sought-after commodities globally, crude oil plays a pivotal role in shaping economies and influencing daily lives. In this article, we will delve into the prices of crude oil in Ghana, exploring the factors that drive fluctuations, the impact on the nation’s economy, and how it affects various industries.

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Crude Oil in Ghana

Crude oil, also known as petroleum, is a raw natural resource that is extracted from the earth and refined into various products. It is a global commodity that trades in markets around the world.

Crude oil is primarily used as a fuel and energy source. It is refined into products such as gasoline, diesel fuel, jet fuel, and heating oil, which are used to power vehicles, heat buildings, and generate electricity. Crude oil is a major source of energy and plays a crucial role in meeting the world’s energy demands.

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Crude oil is indispensable as a chemical raw material. It serves as the foundation for the production of a wide range of products in various industries. Petrochemicals derived from crude oil are used to manufacture plastics, solvents, fertilizers, synthetic fibres, pharmaceuticals, cosmetics, and many other intermediate and end-user goods.

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Also, Crude oil is used in the production of everyday consumer products. It provides the ingredients for items like soaps, detergents, paints, lubricating oils, paraffin wax, and asphalt.

The oil industry, fueled by crude oil, contributes to economic development. It generates export revenue, attracts foreign direct investment, and creates job opportunities in various sectors such as exploration, production, refining, and distribution.

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Crude oil is a significant factor in global trade and politics. The demand for crude oil often sparks political unrest, as a small number of countries control the largest reservoirs. The price and availability of crude oil can impact the global economy and geopolitical relationships.

Ghana is a significant exporter of crude petroleum, with exports totalling $3.57B in 2021.

Price of Crude Oil in Ghana

Over the years, Ghana’s crude oil production has varied, averaging 58.25 BBL/D/1K (thousands of barrels per day) from 1993 to 2023. The highest production was 218.26 BBL/D/1K in June 2019, and the lowest was 1.40 BBL/D/1K in January 1994.

In June 2018, the price of crude oil in Ghana was 75.900 USD/Barrel. In March 2022, the price of crude oil in Ghana was 112.51 U.S. dollars per barrel. As of July 1, 2023, the price of 1 barrel of crude oil in Ghana was 808.38 GHS.

Now the prices of crude oil are;

1 Litre – 5.63 GHS

1 Barrel – 895.76 GHS

5 Barrels – 4478.8 GHS

10 Barrels – 8957.6 GHS

20 Barrels – 17915.2 GHS

40 Barrels – 35830.4 GHS

50 Barrels – 44788 GHS

100 Barrels – 89576 GHS

Factors Affecting the Prices of Crude Oil in Ghana

There are several factors that affect crude oil prices in Ghana, amongst these factors include;

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Income and price elasticity: Crude oil demand in Ghana is income and price inelastic, meaning that changes in income and price have a relatively small effect on demand.

International crude oil prices: The price of crude oil in Ghana is also influenced by international crude oil prices. For example, in March 2022, the price of crude oil in Ghana stood at 112.51 U.S. dollars per barrel, which was a considerable increase compared to the previous year.

Crude oil production: Ghana’s crude oil production has been fluctuating over the years, which can affect the supply and demand of crude oil in the country. For instance, the highest production was recorded in June 2019 at 218.26 BBL/D/1K, while the lowest was in January 1994 at 1.40 BBL/D/1K.

Export markets: Ghana is a significant exporter of crude petroleum, and the export markets can also affect the price of crude oil in the country. For example, the fastest-growing export markets for crude petroleum of Ghana between 2020 and 2021 were the United States, India, and Malaysia.

Uses and Importance of Crude Oil in Ghana

Crude oil is an important resource in Ghana, and it has several uses and importance in the country. 

Economic development: The oil industry in Ghana plays an important role in the country’s economic development. In 2020, Ghana produced crude oil amounting to over 173,000 barrels per day. The government of Ghana, through the Ghana National Petroleum Corporation (GNPC), seeks to maximize the country’s prospects in the oil and gas sector and extend the country’s continental shelf to increase the sector’s scope.

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Export revenue: Crude petroleum is one of Ghana’s main exports, and it generated $3.57 billion in export revenue in 2021. 

Energy production: Crude oil is used to produce energy in Ghana. Ghana consumes significant volumes of petroleum products, which are mainly imported. The petroleum products produced in Ghana are mainly exported.

Job creation: The oil industry in Ghana has created job opportunities for Ghanaians. For instance, the establishment of several small and medium-sized local oil marketing companies (OMCs) has increased employment opportunities in the sector.

Recommended Resources:

Is crude oil demand in Ghana’s income and price inelastic?

Yes, according to Oteng-Abayie et al (2018), crude oil demand in Ghana is income and price inelastic. This means that changes in income and price have a relatively small effect on demand.

What is the current price of crude oil in Ghana?

The current price of crude oil varies based on the quantity. A litre of crude oil is 5.63 GHS and a barrel of crude oil is 894.97 GHS.

How much crude oil does Ghana produce?

Ghana’s crude oil production has been fluctuating over the years, with an average of 58.25 BBL/D/1K from 1993 until 2023. The highest production was recorded in June 2019 at 218.26 BBL/D/1K, while the lowest was in January 1994 at 1.40 BBL/D/1K.

How important is crude oil to Ghana’s economy?

Crude oil is an important resource in Ghana, and it has several uses and importance in the country. It contributes to economic development, generates export revenue, creates job opportunities, and attracts foreign direct investment.

In conclusion, the prices of crude oil in Ghana hold immense significance for the nation’s economy and its various industries. As a critical energy resource, fluctuations in crude oil prices can have far-reaching effects on transportation costs, energy production, and overall economic stability.

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