Petroleum 'glut' in international trade means______

Step 1: Analyze the question The question asks for the meaning of the word "glut" when it is used about petroleum in international trade.

Step 2: Explain the concept A glut means an excess supply, which is a situation where the quantity supplied is far greater than the quantity demanded. In economics, this is also called a surplus or oversupply.

When there is a glut in the petroleum market:

• Producers are supplying more crude oil than buyers want to purchase.
• Stocks pile up in storage.
• Prices tend to fall, not rise.

This matters a lot for Nigeria, because crude oil is a major source of government revenue. A global oil glut, like the one in 2014-2016 and again in 2020, causes oil prices to drop and reduces Nigeria's earnings.

Step 3: Evaluate the options

• A. Higher prices for the consumption of petroleum. Wrong. A glut pushes prices down, not up.
• B. An oversupply of petroleum. Correct. This is exactly what "glut" means.
• C. A fall in petroleum production. Wrong. A fall in production would cause a shortage, which is the opposite of a glut.
• D. A higher petroleum price offered by the buyer. Wrong. With excess supply, buyers have the advantage and offer lower prices.

Step 4: Answer The correct option is **B. An oversupply of petroleum.

Exam tip: Link "glut" with "gluttony", which means eating too much. A glut is too much of something. Whenever you see glut, think "oversupply, surplus, falling prices".