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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.