MON OCT 28 2024-theGBJournal| Benchmark Brent oil price fell Monday by 4.34% to $72.75 a barrel, more than $5 below the US$77.96 per barrel assumed in Nigeria’s 2024 budget, while the U.S. West Texas Intermediate futures fell 4.54% to $68.52 per barrel.
With the country already facing stiff economic headwind and heavy budget deficit, the drop brings further pressure on the already emaciated local currency, the naira, import costs and inflation.
Analysts are urging the federal government to urgently begin to re-evaluate its spending priorities as the continued drop in oil prices could gravely affect funding for crucial social programs and impact well-being of the population.
Meanwhile, analysts are discounting chances of severe disruption on oil supplies following Israel’s ”limited” strike on Iran over the weekend avoided oil, nuclear and civilian infrastructure facilities.
Israel attacked Iran’s military facilities in three provinces in response to Iran’s ballistic missiles attack on Israel on October 1.
Citi Bank analysts cut their oil forecast over the next three months by $4 to $70 per barrel over, reflecting views that the strike is unlikely to have any major impact on oil supply.
The market is also nearing oversupply as key producing countries such as Canada, the U.S., Senegal, Brazil and Argentina, ramp up production.
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