Crude oil price plunges 47 percent below Nigeria’s $57 per barrel benchmark

International crude oil price on Monday plunged to $30,  a 47 per cent decline against the $57 benchmark for the  2020 budget. Reuters reported that Brent, against which Nigeria’s crude is priced, fell by $11.62 to $33.45 Monday morning.

The budget signed into law by President Muhammadu Buhari in December 2019 was based on oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.

Demand has been at its lowest as the coronavirus outbreak hit fuel demand in China.

A continuous fall in the international oil price has a negative effect on the external reserves of a country.

The federal government revealed on the March 4 that it plans to review the 2020 budget due to the effects of the coronavirus outbreak.

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday revealed a plan under which it would cut its production by one million barrels per day for the rest of the year.






     

     

    Saudi Arabia reported that it slashed its official selling prices and made plans to ramp up crude output in April.

    “The prognosis for the oil market is even direr than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus,” Goldman Sachs said.

    According to Bloomberg, oil prices have suffered massive drops each time that Saudi Arabia launched a price war to drive competitors out of the market.

    It earlier dropped to $31.02, it’s lowest since February 12, 2016.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement