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.
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.