The current crude oil price at the international market according to the Central Bank of Nigeria (CBN) data yesterday was between $43 and $44 per barrel.
Despite the Nigeria’s diversification efforts, crude oil remains the major income earner for the country with the sub-nationals heavily depending on revenue from oil sales at the monthly
The latest raise in oil price forecast by the International Bank will serve as fresh hope of a quicker recovery for the President Muhammadu Buhari led federal government which has pegged oil price at $38 per barrel in the 2016 budget.
The crude oil market recovered from a low of $25 per barrel in mid-January to $40 per barrel this month, following production disruptions in Iraq and Nigeria and a decline in non-Organisation of Petroleum Exporting Countries output, mainly US shale.
A proposed production freeze by major producers failed to materialise at a meeting held in Doha, Qatar mid-April.
Shortly after the collapse of the Oil freeze talk, the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Ibe Kachikwu assured that despite the stalemate on crude oil production freeze, the Organisation of the Petroleum Exporting Countries (OPEC), will continue to work to achieve consensus for output freeze among oil producers.
“OPEC must work at achieving a workable consensus on the issue by bringing everybody on the negotiating table”, he said.
However, the World Bank yesterday said crude oil market rebounded to $40 per barrel in April following production disruptions in Iraq and Nigeria and a decline in non-Organisation of the Petroleum Exporting Countries (OPEC) production, mainly U.S. shale.
The World Bank explained that the review of the forecast followed improving market sentiment and a weakening dollar, declaring that its new 2016 forecast for crude oil prices is now $41 per barrel from $37 per barrel, pointing out that Commodity Markets Outlook, as an oversupply in markets, is expected to recede.
The senior economist and lead author of the Commodities Markets Outlook, John Baffes, said in the report released yesterday that: “We expect slightly higher prices for energy commodities over the course of the year as markets rebalance after a period of oversupply”.
“Still, energy prices could fall further if OPEC increases production significantly and non-OPEC production does not fall as fast as expected.” Click to signup for FREE news updates, latest information and hottest gists everyday
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