By Uche Mbah
Crude oil price crashed overnight to $14 per barrel, and experts say it is expected to stabilize at $10. This was attributed to the disruption of the supply chain by COVID 19.
With oversupply wrecking the industry, there appeared to be no hope Nigeria will get out of the woods even after the lockdown is lifted. This magazine had reported the international Monetary Fund fears that Nigeria is headed to the worst recession since it became a nation.
Currently, Nigeria is facing a storage crisis since her oil is floating at the high sea with little prospect of buyers. China, one of Nigeria’s heavy buyers, recently shows signs of recession after the Coronavirus pandemic. Besides, many countries are divesting from the country, the latest discussion of divestment coming from Japan, which has had the Olympics postponed due to COVID 19.
Nigeria has no reliable inland storage facilities.
Nigeria crude production cost is said to stand at about $28. The budget was initially predicated on $57 per barrel.
OPEC and other producers had decided to cut production, but this appears to have no effect on the slide. There has been a huge drop in demand since most countries are on lockdown due to COVID 19, besides the price war between Saudi Arabia and Russia. Russia supplies most of Europe.
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