http://uk.businessinsider.com/oil-drops-below-30-per-barrel-on-friday-january-15-2016-1

Oil crashed past the $30 (£20.85) per barrel mark for the second time in a week this morning, as sentiment on the world's most watched commodity continues to stink.

As of 12:40 p.m. GMT (7:40 a.m. ET) both major benchmarks, West Texas Intermediate and Brent crude, were trading well below the $30 mark, and they have even gone lower than $29.50. WTI leads the losses and has fallen more than 5.6% in trade Friday. At pixel time it's worth $29.44 ($20.47) a barrel.

Oil has now dipped below the $30 mark for the second time this week. Brent hit $29.96 a barrel briefly on Wednesday before recovering to close the day at around $30.20 (£21).

Today's drop below $30 looks like its going to stick, and that's one of the biggest worry traders have right now. Many fear this will trigger an even bigger sell-off and make $20, or even $15 oil, a reality.

Oil's seemingly relentless march toward zero is being driven by a few crucial factors. Fears about China are everywhere in the markets, as the country's stock markets continue to suffer in the first couple of weeks of 2016.

All three of China's major indexes closed down by about 3% on Friday afternoon, erasing any gains made Thursday. The Shanghai Composite is down 18% this year, and it has hit its lowest level since December 2014.

The glut of oil created by the OPEC nations, led by Saudi Arabia, is also proving to be a huge challenge to global oil traders.

Europe's markets haven't reacted well to the renewed slump in both Chinese equities and oil, and all the continent's major indexes are trading in the red so far Friday.

2016 just doesn't seem to get any better.


Fuel prices at the pumps should by now be less than N50 per litre, when will the APC government do something about the prices?

Yawa!!!

Today's drop below $30 looks like its going to stick, and that's one of the biggest worry traders have right now. Many fear this will trigger an even bigger sell-off and make $20, or even $15 oil, a reality.

The technical charts seem to validate that the downtrend is firmly in force.
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For those who may not know, cost of oil production in Nigeria ranges from $22 - $31 per barrel depending on the location of the Oil well (onshore, offshore, deep-water). I understand that the average production cost is around $25pb.
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Kindly note that, though oil revenue accounts directly for only about 23% of government revenue in 2016, most of the other revenue lines have dependency on oil. Most oil companies and their service companies will declare lower corporate profits or losses. Meaning government will loose Petroleum Profit Tax and Company Income Tax from these firms. Banks who have exposure to oil&gas will see non-performing loans rise and corporate profits reduced, also leading to lower tax to govt. Oil companies might embark on massive retrenchments, also meaning that the government will loose the PAYE of all those employees. The customs and NPA will also see their revenue take a hit as these O&G companies are responsible for a lot of importation. Airlines and hotels won't be spared as these companies cut down on expenses. As people have less money to spend, they might resort to selling their shares to meet up expenses, leading to selling frenzy in the stock market. (Expect NSE Index to drop below 20,000 and most stocks to trade in kobos).
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The summary is that, the overall impact of lower oil price on government revenue and the larger economy can best be imagined.

I will place my buy on this commodity when the price hits $20!