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Fri, Mar

Hope For Nigeria’s 2019 Budget As Oil Price Hits $64.56 Per Barrel

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An emerging report indicates that for the first time in 2019, oil price in the international market on 15th February 2019 rose from $62.00 to $64.56 per barrel in the international market, indicating $4.56 in excess of Nigeria’s $60.00 budget benchmark in the 2019 appropriation bill.

 

In particular, the prices of Brent, West Texas Intermediate (WTI) and Organization of Petroleum Exporting Countries (OPEC) basket stood at $64.56, $53.79 and $62.94 per barrel, respectively.

Market speculators attributed the development to the positive report of OPEC, which has intensified efforts to eliminate excess supply from the market. OPEC output falls by nearly 800,000 bpd in January. Saudi Arabia, the UAE, and Kuwait chipped in most of the reductions.

Russia only lowered output by 90,000 bpd, far short of the 230,000 bpd promised as part of the December deal. Saudi Arabia affirmed that it would continue to cut output, with plans to lower production to as low as 9.8 mb/d in March, or roughly half a million barrels per day lower than it had promised.

The development has jumped oil prices as contained in OPEC latest oil market report that the price may leap further because of increased demand when as Japan’s growth forecast remained at 1.0per cent for 2019 and stands at 0.8per cent in 2018. In the non-oil Exporting Countries (OEC), China’s growth forecast of 6.1per cent in 2019 remains unchanged from the previous month, following slightly better than expected growth in 2018 of 6.6per cent.

Also, India’s growth forecast remained at 7.2per cent for 2019, after 7.5per cent in 2018. Growth in Brazil remains unchanged at a forecast of 1.8per cent for 2019, following 1.1per cent in 2018. Russia’s 2019 GDP growth forecast was revised down slightly to 1.6per cent, the same growth level as seen in 2018.

While some positive signals still support global economic growth at around the current forecast level, underlying risks continue, considering ongoing trade tensions, monetary policies and ongoing challenges in several emerging and developing economies

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