The fate of oil was again sealed by the Organisation of Petroleum Exporting Countries (OPEC) which announced it would maintain its maximum production limit at 30 million barrels of oil a day. When OPEC failed to cut output last November, oil prices plunged further as the oversupply in the market continued.
The cartel’s decision is premised on the assertion that except there was a coordinated production reduction with other Non-OPEC oil producers, it would make no sense for it to cut production and lose its market share. Driving this assertion is Saudi Arabia, backed by fellow gulf states.
For crude oil revenue to fund 75 percent of Nigeria’s N4.49 trillion budget for 2015, the country needs oil to sell at $53.15 per barrel and will not have excess to save. As at Thursday, OPEC’s basket of 12 crudes which includes Nigeria’s Bonny light sold at $59.62 per barrel. OPEC’s decision to maintain output is expected to drive prices further down.
Faced with security challenges and infrastructural decay among others, Nigerians are counting on new president Muhammadu Buhari to bring about change.
