How one-day gains in the global oil market push Nigeria’s excess crude reserves by $22.1 million

shakirudeen taiwo

September 26, 2017 2:54 PM

This is a sign that economic recovery of Nigeria would be sustained by high revenue from oil.

Nigeria experienced the biggest gain on Monday, September 25, 2017, as crude oil price hits $58 per barrel, surging the country’s excess crude account by $22. 1 million (N6.76 billion).

The price is the highest price for the sweet crude oil (Brent crude) since the beginning of 2017.

Crude oil is the major export and foreign exchange earner for Nigeria. In the 2017 budget, the government benchmarked crude oil at $44.5, accruing $13.5 excess on each barrel sold by the country. Basing this estimation on the 1.8 million barrels produced by the country, it would amount to $22.1 million gains for the country on Monday.

The Joint Ministerial Monitoring Committee (JMMC) meeting of OPEC and Non-OPEC Countries was held on Friday, September 22, 2017, to consider inclusion of Nigeria, Libya and Iraq in the oil cut deal. But, the idea was dropped as Nigeria has not exceeded the set benchmark of 1.8 million.

The president of Lipow Oil Associates, Andy Lipow noted that the surge in oil price is a response to the outcome of the OPEC and Non-OPEC meeting.

“The market anticipates that OPEC and non-OPEC (exporters) are going to continue with their production cuts through 2018,” said Andy Lipow.

Following glut in the international crude oil market in Q3 2015, the OPEC required its members to cut down on their oil production quota to stabilise prices in the international oil market and ensure the fiscal stability of their economies.

shakirudeen taiwo

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