Nigeria may be in for tougher times in the next few months with predictions of further decline of crude oil prices in the international market.
But, to forestal the impact of the slide in crude oil prices, the Executive and the Legislative arms of government have been advised to quickly consider a downward review of the 2017 oil price budget benchmark of $44.50 per barrel
Bolanle Olutosin, an analyst at Afrinvest, said the production of more fuel efficient products, and the use of solar, wind and other forms of green energy sources would further reduce the demand for crude oil in most developed countries.
She said there is currently a supply glut in the market, thus compelling the Organisation of Petroleum Exporting Countries (OPEC) to further look for ways to shore up oil prices in the market.
One of such measures taking by OPEC was its invitation of Nigeria and Libya to the Ministerial Monitoring Committee meeting in Russia on July 24, fuelling speculations that Nigeria and Libya may not likely be exempted from further production cuts after the meeting.
Nigeria’s oil production, hit 2.05 million barrels per day (mbpd) in June while output from OPEC hit a 2017 high in the same month hitting a mark of 32.72 million bpd, despite the group’s pledge to hold back output.
According to industry statistics, increase in oil production between Nigeria and Libya for the months of May and June is 440,000 bpd, a development that has left OPEC uncomfortable, fearing that the continued increase in oil production by the countries could spell doom for oil prices.
‘‘For me, Abuja should be thinking of ways to improve the nation’s foreign exchange reserves because we can actually go back to the drawing board to see how we can change the oil price budget benchmark. But as far as we are concerned at Afrinvest, we are predicting that oil prices will actually go below $45. It will range between $45 and $50 a barrel. So there is still a little headroom for the country. But at the same time, for the benefit of our budget, reserves and our exchange rate as well, it means they will have to change the budget benchmark. Again, if oil supply is not cut significantly, there may be no change in prices, and the decision to place Nigeria and Libya on production cut may not have the desired impact,’’ she said.
Head Energy Research at Ecobank Transnational Corporation, Mr.Dolapo Oni, said if the July 24 meeting in Russia agrees on a production cap for Nigeria, it may not achieve the intended result because more Shale oil from the USA is being pumped into the market as well.

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