Oil price plunge, another challenge for Nigerian economy
Buckle up Nigeria, oil price hike is here!
At the start of work this week, Reuters report highlights oil prices easing after US President Donald Trump urged the Organization of the Petroleum Exporting Countries (OPEC) with a tweet to stabilize prices.
International Brent futures declined 0.1%, while US West Texas Intermediate (WTI) crude futures dropped by 0.4%.
According to analysts, the US was keen to counter a recent increase in prices driven by reduced output by major exporters. But this would not favour Nigeria as the country depends very much on crude oil revenues.
The Trump tweet says the following: “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!”
Frame Funds Sydney portfolio manager Hue Frame said that “The problem is we are having these sporadic tweets impacting global commodity markets. It does make it increasingly difficult to have a consistent fundamental read on the data.”
Late last year, OPEC and some non-affiliated producers such as Russia, Nigeria, Saudi Arabia, agreed to reduce production by 1.2 million barrels per day (Mbpd) to prevent supply glut.
President Muhammadu Buhari said in a statement, “as a responsible member of the Organisation of Petroleum Exporting Countries, Nigeria was willing to go along with the Saudi initiative in limiting output so that prices would go up.”