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HomeTop NewsNigeria’s 2024 budget under threats as oil prices slide further

Nigeria’s 2024 budget under threats as oil prices slide further

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Nigeria’s 2024 budget recently submitted by President Bola Tinubu to the parliament may suffer setbacks due by the performance of crude oil prices at the international market due to skepticism over the latest decision by the global cartel to slash output.

Market was pressured by investors scepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand, though the risk of supply disruptions from the Middle East conflict limited losses.

Nigeria has presumed its budget calculation on $77 per barrel and based on plans to product 1.82 million barrel of oil per day.

However, with the frequent drop in oil prices at the international market and the possibile inability of the country to meet its projected output, the country’s budget estimate may suffer major shortfall unless the National Assembly approved realistic benchmark pricing for the spending estimate.

Monday’s fall in crude oil adds to a 2 percent decline last week after the supply cuts announced on Thursday by the Organisation of the Petroleum Exporting Countries (OPEC) and allies, including Russia, together known as OPEC+.

Brent crude futures were down $1.10, or 1.4 percent, at $77.78 a barrel by 0921 GMT. U.S. West Texas Intermediate crude futures fell $1.09, or 1.5 percent, to $72.98.

“Crude seems to be under continued pressure from the OPEC+ decision,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

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The OPEC+ cuts were voluntary in nature, raising doubts about whether or not producers would fully implement them. Investors were also unsure about how the cuts would be measured.

Sluggish global manufacturing activity also weighed on prices.

The latest data implies strong economic headwinds that reinforce concerns about oil demand growth, said Tamas Varga of oil broker PVM.

Geopolitical considerations were back in focus as fighting resumed in Gaza. Three commercial vessels came under attack in international waters in the southern Red Sea, the U.S. military said on Sunday.

Elsewhere, Western countries have stepped up efforts to enforce the $60 a barrel price cap on seaborne shipments of Russian oil imposed to punish Moscow for its war in Ukraine.

Washington on Friday imposed additional sanctions on three entities and three oil tankers.

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