2019 Budget Is Higly Intimidated While Oil Price Subside to $60

Must Read

US $10.7m Amsalco Shopping Mall Breaks Ground in Kaduna

The mall dubbed ‘Amsalco Galaxy Mall’ is being constructed at the Murtala Muhammed Square in the heart of Kaduna...

Advancing Economic Growth in Africa; Tony Elumelu Meets with the Presidents of Congo DRC and Rwanda

As the number of African entrepreneurs continues to rise, governments have begun to develop programs and platforms conducive enough...

Performance of all PFAs in Nigeria for July 2019

Have you ever taken time to check out the Returns on Investment (ROI) of the funds in your Retirement...
- Advertisement -
- Advertisement -

The fundamentals of the 2019 bill are below menace as crude oil rate collapsed again yesterday to level at $60 per vessel, the equal benchmark on which the N8.8 trillion budget was asserted.

Through the developments of the budget calculations, the crude oil rate was around $80, thus giving the federal government the comfort to ignore the $50 benchmark suggested in the Economic Recovery Growth Plan (ERGP) and to opt for $60 as the oil benchmark on which to base revenue projections for the budget.

Concerns that Iranian oil exports to the global market would drop because of renewed sanctions by the United States had pushed the price slightly above $80 per barrel for the first time since November 2014.

However, the unexpected rise in the US crude inventories, coupled with a weaker outlook for global demand, has continued to push down oil prices, despite the efforts of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, led by Russia, to reduce excess supply in the global market.

Oil prices yesterday fell more than two per cent, pressured by a sudden rise in US crude and weaker demand.

Read:  FIRS introduces six online tax solutions

While the international benchmark, Brent crude fell $1.36, or 2.2 per cent, to $60.93 per barrel, the US West Texas Intermediate crude was down $1.39, or 2.6 per cent, to $51.88 per barrel.

The slump in the oil prices came after the US Energy Information Administration (EIA) reported domestic crude stockpiles climbed last week by 2.2 million barrels, against analysts’ forecast of a decrease by 481,000 barrels.

Read:  Finnfund Enhance Foray Into Nigerian Energy Market

Reuters reported that petrol stocks also increased more than expected.

The EIA had Tuesday cut its forecasts for 2019 world oil demand growth and US crude production.

Trade tensions between the US and China, the world’s two biggest oil consumers, also weighed on prices.

The oil market has been weighed down by concerns about slowing global growth due to the US-China trade war and President Donald Trump’s threats last week to place tariffs on Mexican imports.

Trump also said he was holding up a trade deal with China.

Read:  United Capital Launches its New, Improved Online Investment Platform, InvestNow.Ng

To prevent oversupply and prop up the market, OPEC, together with allies including Russia, has withheld some production since the start of the year.

The producers, collectively known as OPEC +, have limited their oil output by 1.2 million barrels per day since January 1, this year to prop up prices.

With the next meeting of OPEC set for June 25, the oil market is looking if the world’s major oil producers will prolong their supply cuts.

Goldman Sachs was quoted by agency reports as saying an uncertain macroeconomic outlook and volatile oil production from Iran and others could lead OPEC to roll oversupply cuts.

The Energy Minister of the United Arab Emirates, Suhail bin Mohammed Al-Mazroui, said on Tuesday that OPEC members were close to reaching an agreement on continuing production cuts.

After OPEC’s meeting on June 25, the group will hold talks with its allies led by Russia on June 26, although sources have told Reuters that Russia has suggested a date change to between July 3 and 4.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

Latest News

Nigeria’s GDP could easily grow to $1trn by 2023 If we revive these 10 moribund industries

Nigeria’s GDP could easily grow to $1trn by 2023 If we revive these 10 moribund industries(1) Ajaokuta Steel MillNo...

Chijioke Charles Emerges Winner Of Hi-Life Fest 2019 (Photos)

Life Lager, the beer brand renowned for inspiring progress, and for celebrating the culture of the people has added another landmark achievement to its...

British Airways’ reaches a technological milestone

British Airways reached a technological milestone when the 100,000th aircraft was pushed back using a fully automated, remote-controlled Mototok device.Traditionally diesel tugs are used...

Mark Angel Gets His Own Mouka Flora Mattress

Mark Angel best known for the Mark Angel Comedy series, often featuring his child comedian niece, Emmanuella, just received the new Mouka Flora mattress.In...

FCT NSE seeks welfare of Inmates

The Nigerian Society of Engineers (NSE) Maitama Branch, Federal Capital Territory (FCT) has called on government and privileged Nigerians to support inmates serving jail...

More Articles Like This