Nigeria Economic Update (Issue 29)

Issue 29

OPEC weekly basket price decreased marginally from $45.95 on June 24, 2016 to $45.26 on July 1, 2016, while Nigeria’s bonny light fell by $1, from $48.90 to $47.91. The apparent decline in crude oil price was driven by lingering market demand uncertainty, following the unexpected Brexit referendum. More so, ease in supply disruptions in Nigeria and Canada may have contributed to the downward pressure on prices. Going forward, until there is greater regulatory precision on global oil output levels, prices may likely remain stuck or continue to exhibit a downward trend. Although, Nigeria’s fiscal constraints slightly relaxed with oil production increasing in the review week (following repairs on sabotaged pipeline channels), potential global crude oil oversupply threatens government’s revenues. However, oversupply threats could be reduced if there is a consensus on oil production quotas in the upcoming OPEC meeting. 


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