Some bad news Nigeria, oil price has fallen again

Oil prices dipped on Tuesday as the United States continues to pump more crude into an already saturated market. That means Nigerians have something more to worry about this week.

Reuters reports that U.S. West Texas Intermediate (WTI) crude futures were sold at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close.

Brent crude futures--where Nigeria's oil is pegged--sold at $64.77 per barrel, down 18 cents, or 0.3 percent.

Both crude benchmarks dropped by around 1 percent in their Monday sessions.

Oil went above $60 a barrel in February and was as high as $67 per barrel in December of 2017

On January 25 however, oil was trading for $66 per barrel, meaning that this week’s decline has been long in coming.

Supply glut

Oil prices would have plunged even lower if OPEC and Russia hadn’t placed a restraint on production to avoid a glut or oversupply.

The United States Shale Oil production for countries like Nigeria where crude oil accounts for over 70 percent of government revenue and a chunk of GDP.

U.S. Shale production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russia, according to the International Energy Agency (IEA).

“Oil prices pulled back yesterday as basic fundamentals of oversupply continued to worry the markets,” said Sukrit Vijayakar, director of energy consultancy Trifecta.

“Oil prices moved lower ... after (the) Energy Information Administration published a report that crude production from seven major U.S. shale plays is expected to see a climb,” said Stephen Innes who is head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

President Muhammadu Buhari and his team have been praying for higher oil prices in order to rebuild dilapidated infrastructure and revive a failing economy.