Anxiety may have heightened on how to finance Nigeria’s 2017 budget as oil prices fell to a seven-month low yesterday, after news of increases in supply by several key producers weakened the Organisation of the Petroleum Exporting Countries (OPEC) attempts to support the market through an output freeze., The Guardian reports.
Benchmark Brent fell from $47.06 it sold on Monday to settle at $46.91 a barrel as at the early hours of Tuesday. U.S. crude oil also decreased from $44.35 a barrel to $44.20, its lowest close since November 14, 2016. In the 2017 budget, Nigeria’s executive arm set the crude oil benchmark at 2.2 million barrels per day at a price of $42.5 per barrel, before the senate pushed the benchmark to $44.5 a barrel with hopes that the black gold would stay around $50 a barrel.
But current realities at the global crude oil market however show that oil prices may fall below the current price as OPEC struggles with United States shale oil and increased output from Nigeria and Libya. Specifically, the nation generated about $114 million from the export of about two million barrels per day in May 2017, when prices stood at $57 per barrel. With the current crude oil price put at $47.06 per barrel, Nigeria’s oil revenue has however dropped to $103.5 million, resulting to a loss of $11.5 million.