After OPEC meeting, oil price slips below Nigeria’s new benchmark

Less than 24 hours after the Organisation of Petroleum Exporting Countries, OPEC, ended its 166th meeting, with a resolution to keep production quotas unchanged, oil prices dipped further close to $70 per barrel on Friday, surpassing a new benchmark proposed by the Nigerian government.

Latest OPEC Secretariat calculations on Friday showed that the price of its basket of 12 crudes stood at $70.80 dollars per barrel on Thursday, shedding $2.90, or 3.94 per cent from the $73.70 per barrel recorded on Thursday.

The development would be bad news for the Nigerian government battling to respond to one of the most serious oil price falls.

The federal government has proposed a new benchmark of $73 per barrel, from $78 approved in the 2014 budget.

The latest crash indicates the $73 benchmark may not be realistic, a concern earlier raised by the governor of the Central Bank of Nigeria, Godwin Emefiele.

Mr. Emefiele, had on Tuesday, at the end of the Monetary Policy Committee (MPC) meeting in Abuja described the new oil benchmark as “overly optimistic”, as the decline appears permanent.

But the Minister of Finance, Ngozi Okonjo-Iweala, has assured Nigerians that they have no reasons to panic, as the government has a comprehensive strategy, based on number of scenarios, to cushion the impact of the slide in crude oil price even if it were to drop to as low as $60 per barrel.

“Our scenario-based approach to managing the impact of the oil price drop is proactive and comprehensive. Even if the price drops to 60 dollars we are ready,” the Minister said at the Capital Market Retreat organized by the Securities and Exchange Commission (SEC).

“Panic is not a strategy. We are managing the situation to keep the economy on a stable sustainable course and we will not listen to those who want us to throw up our hands in despair and give up,” she added.

In an attempt to contain the situation and stabilize the economy, Nigeria has since reacted, unfolding a number of austerity measures, including a review of the oil benchmark proposed in the medium term expenditure framework (MTEF) for the 2015 budget from $78 to $73.

Prior to the OPEC meeting on Thursday, commodities market analysts had anticipated a decisive intervention of the group, by reviewing downwards production quotas of members in a bid to stem falling prices in recent times.

From a high of an average of $105.61 per barrel in July, the price slummed to about $73.47 per barrel on Wednesday, with market analysts’ projections showing average futures crude price in the next six months likely to crash to about $70.

But, at the end of the meeting, OPEC said a review of its Secretary General’s report on global oil market outlook, particularly the supply/demand projections for the first, second, third and fourth quarters of 2015, was not in favour of a decision to change the existing production quota of 30 million barrels reached in December 2011.


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  • Realnigerian

    OBJ is correct again. Oil prices is going down all the way to $65.

    What is our clueless evil GEJ government going to do now?

    • Ken

      GEJ will handle the situation like every other affected country will.

      • Realnigerian

        You mean GEJ will fail woefully unlike other countries that proactively extremely plan for situation like this

    • emmanuel

      Satanic Nigerian. Rice and Cassava Production, Car Assembly, Local Fish Trawling, Expanded Industrial reforms are part of the diversification started two years ago.

      Do you use your commonsense?

      When the Finance Minister insisted on lower benchmark early in the year, your half sense Tambuwal said it must be high. If una get sense, should he not have been impeached for leading Nigeria into this current state?

      You should be sent to school with Autistic children, because your reactive sense is way below normal.

      • Realnigerian

        Are you really sure you have common sense? You have have just regurgitated the crap you and others are fond of saying about GEJ’s TAN. Are you really serious?

        • Kay Soyemi (Esq.)

          lol, Realnigerian,

          How can common sense descend to such a low level where he can get one?

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  • Dr. Kay

    This is when we going to see how clueless these clowns at the top echelons of governance are , their clueless demeanor will be found out, they will have no idea of how to resuscitate an already moribund economy , instead the only activity that will continue at ferocious pace and intensity will be alooter continua , I am not holding my breath or else I will die of asphyxiation, these Dumbo and company must be flushed out like an ugly constipated Kak just released into the loo asap ,this time next year Dumbo should be a figment of past nightmare and ugly memories, tufiakwa.

  • Rommel

    Nigerians will soon realize that no one is in charge of the country

  • Realnigerian

    Nigerians will soon know the definition of real poverty when the oil price is going all the way down to $30 per barrel. USA & Co wants to rubbish this government and their ways. Actually dollar will go all the way down to $20. So there will be no more fighting over spilt milk

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    Useless Jonathanonians, when the oil price jump by 100% all you hear is quit as nothing happens, but when it drops by 10% all you hear is noise economy this economy that as if the sky is going to fall. Let me even check and see whether this petrol station is cheating me for buying petrol at N97 per liter, even though that prostitute minister is saying she is subsidising it.

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  • Dr Pat Kolawole Awosan

    Good that the hidden poor managerial skill of Mrs Diezani Alison Madueke as Nigeria petroelum minister and president of OPEC is now exposed as the oil bench mark prices fell below N60 dollars per barrell on Mrs Madueke’s leasdership watch.