2019 BUDGET: Hope rises as oil prices rebound to $60 benchmark

Fears that Nigeria’s 2019 budget may suffer huge revenue short fall may be abetted as the prices of crude oil in the international market rebounded on Wednesday, selling at the $60 per barrel benchmark set for the budget by the Federal Government.

Prices of Brent, West Texas Intermediate, WTI, and OPEC Basket of 14 crudes stood at $60.00, $59.91 and $56.11 per barrel respectively.

The rise in the prices is seen as a result of the ability of OPEC to mobilise its members and others not to pump excess oil into the volatile market.

However, a source in OPEC said the market was still covered with an air of uncertainty, meaning that many factors can still compel price to leap further or drop, even beyond expectation.

It would be recalled that the Secretary General of OPEC, Dr. Muhammad Barkindo, while speaking in Angola a few days ago, said: “OPEC knew it had to act in the face of this potential calamity. Throughout 2016, extensive consultations were undertaken with our non-OPEC partners, aimed at building consensus about the strategic urgency of rebalancing the global oil market in a collective manner.

Read also: UN report says Nigeria lost $2.8bn to oil related crimes in 2018

“Twenty-four (now twenty–five) oil producing nations agreed at the first OPEC and non-OPEC Ministerial Meeting held on the 10th of December 2016 in Vienna, on a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

“What would become clearer in time is that one of the greatest inherent strengths of the ‘Declaration of Cooperation’ (DoC) was its flexibility, grounded on the core principles of equity, fairness and transparency. Over the last two years, the partners have been able to modify course depending on conditions in the market. When the market appeared skewed to oversupply, we have reacted accordingly, and equally, when consumers expressed concerns regarding demand outpacing supply, the partners in the DoC have taken appropriate action.”

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