By Udeme Akpan
International oil price, yesterday, reversed its two-week upwards movement, slashing $2 to hover at $60.90 over fears of excess supply from non-OPEC member nations.
Specifically, the prices of Brent, West Texas Intermediate, WTI, and OPEC basket stood at $60.92, $52.18 and $59.63 respectively.
At the current price, Nigeria’s 2019 budget benchmark of $60.00 per barrel appears threatened again.
However, despite the fall in the general price level, the Organisation of Petroleum Exporting Countries, OPEC, remained optimistic of achieving market stability.
In its latest report sent to Vanguard, OPEC stated that stability is gradually returning to the market, which witnessed price slump from $85.00 in October to less than $50.00 in December 2018, especially as the Joint Ministerial Monitoring Committee (JMMC) was working to achieve the mission.
It stated: “The Joint Ministerial Monitoring Committee (JMMC) has expressed its utmost satisfaction with the steady and robust achievements of the two-year old ‘Declaration of Cooperation’ between OPEC and participating non-OPEC oil producing countries.
“The JMMC noted that countries participating in the ‘Declaration of Cooperation’ achieved an overall conformity level in November 2018 of slightly below 100%, hitting 98% for the month.
“It is evident that significant progress has been made towards the goal set at the 4th OPEC and non-OPEC Ministerial Meeting of 23 June 2018, whereby countries agreed to strive to adhere to the overall conformity level, voluntarily adjusted to 100%, as of 1 July 2018 for the remaining duration of 2018.”
“The overall conformity level since the beginning of the ‘Declaration of Cooperation’ in January 2017 is well above 100%, coming in at 116%.
“The Committee confirmed the attached new voluntary production adjustments effective as of 1st of January 2019 for an initial period of six months, based on the unanimous decisions taken at the 175th Meeting of the OPEC Conference and the 5th OPEC and non-OPEC Ministerial Meeting on 7 December 2018.
“These voluntary production adjustments will continue to be monitored by the JMMC on a monthly basis, ably supported by the Joint Technical Committee and the OPEC Secretariat, in an open and transparent manner.
“The JMMC calls on all participating countries of the ‘Declaration of Cooperation’ to redouble their efforts in the full and timely implementation of the supply adjustments to ensure that the oil market remains in balance in 2019.”
President Muhammadu Buhari had while presenting the budget to the National Assembly stated: “The 2019 Budget proposal is based on the following assumptions: Oil price benchmark of $60 per barrel; Oil production estimate of 2.3 million barrels per day, including condensates; Exchange rate of N305/$; Real GDP growth of 3.01 percent; and Inflation Rate of 9.98 percent.
“Notwithstanding the recent softening in international oil prices, the considered view of most reputable analysts is that the downward trend in oil prices in recent months is not necessarily reflective of the outlook for 2019.
“However, as a responsible Administration, we will continue to monitor the situation and will respond to any changes in the international oil price outlook for 2019. With regard to oil production, I have directed the NPPC to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.”