SAT, APRIL 11 2020-theG&BJournal- Crude Oil prices crashed back towards the $20 mark Friday despite the huge production cut agreement reached by OPEC+ members.
OPEC+ agreed to a 10 million b/pd cut, the largest production cut in history so far. The agreement also called for Russia and Saudi Arabia to cap production at 8.5 million b/pd for May and June but markets are in disagreement on whether the cut is sufficient enough to balance the demand deficit. Both Brent and WTI were sold off over concerns that the cuts are adequate enough to cover the demand and supply fundamentals.
Brent fell back -1.36% to $31.48 p/b while the WTI traded at $22.76.
The drop leaves the prospect of Nigeria’s adjusted budget estimate still in limbo. The country rebased its budget estimate at $30 per barrel and crude oil production of 1.7 Million Barrels per day, expecting a price rebound to translate to additional revenues of not less than $2.8 Billion Dollars for the Federation
Timipre Sylva, Minister of State for Petroleum Resources, said Friday he expected that the historic intervention when concluded will see crude oil prices rebound by at least $15 per barrel in the short term.
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