2019 budget threatened as oil price falls below benchmark

Nigeria’s 2019 Budget may face hiccups as the current crude oil prices in the international market has fallen below the Budget benchmark.

On Monday, crude oil price dropped from $66.00 to $57.00 per barrel in the international market, indicating $3.00 below the $60 benchmark of the 2019 budget.

The price of Brent fell by as much as 4 per cent, hitting a low of $57.20 a barrel, in its third straight day of decline, while West Texas Intermediate, the US benchmark, weakened as much as 4.1 per cent to $47.84, the lowest level since September 2017.

Similarly, the price of Organisation of Petroleum Exporting Countries, OPEC, basket of 15 crudes stood at $58.24 a barrel, compared with $59.07 the previous Friday, according to OPEC Secretariat calculations.

Read also: Nigeria to export stranded power to West Africa

According to reports, the situation was not anticipated as stakeholders, who rose from the recent 5th OPEC and non-OPEC Ministerial Meeting, were optimistic that stability would be achieved in the global market.

OPEC stated in a statement after its meeting in Vienna: “Following deliberations on the immediate oil market prospects and in view of a growing imbalance between global oil supply and demand in 2019, hereby decided to adjust the overall production by 1.2 mb/d, effective as of January 2019 for an initial period of six months.

“The contributions from OPEC and the voluntary contributions from non-OPEC participating countries of the ‘Declaration of Cooperation’ will correspond to 0.8 mb/d (2.5%), and 0.4 mb/d (2.0%), respectively.”

However, the current situation was said to have been fuelled by weaker oil demand amid over-supply from producing nations, currently not involved in OPEC and Non-OPEC accord.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now